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There is a universal consensus that the Fed will leave the interest rate where it is, but that doesn’t mean there aren’t other policy changes that could happen. We have reason to think that the Fed might be worried about the economy. There could be some tension at the meeting that starts today and ends tomorrow.
It’s Not Just COVID
Of course, COVID is the dominant factor in any recent monetary policy discussion. But recent reports show that the US’ recovery after cases peaked in April might be stalling.
While case numbers have dramatically increased over the last month, death rates have not increased as much. Authorities have been loath to reimpose costly lockdowns.
Many in the market are calculating that massive lockdowns are a thing of the past. This is because the economic cost is too high for most governments. The result is asset inflation even as cases rise, with investors taking advantage of low-cost borrowing to buy anything and everything.
The question ...
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