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There has been a lot of speculation about what the FOMC could decide at their two-day rate decision meeting which ends tomorrow.

Interest rates, as expected, are likely to remain the same.

However, there has been a lot of talk regarding the potential new policies that the Fed could introduce. Especially after Powell’s comments at Jackson Hole!

Is it Time for an Average Inflation Target?

There is a pretty firm consensus that in the statement accompanying the rate decision, the FOMC will change their inflation target language.

The current version is “symmetric 2% inflation objective”. And it’s likely to read something along the lines of inflation averaging over 2% over time. This is in line with formally adopting the new inflation target as we’ve described previously.

This point is likely to get a substantial amount of media coverage. However, it probably won’t influence the market all that much since it’s mostly priced in.

What could jolt the do...

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