Last FOMC meeting of 2020 is upon us
Weekly Cash Commentary
The continuing second-wave surge of the coronavirus and the hope for distribution of a vaccine pushed other economic news to the side last week. So, in the cash management world, eyes turned toward the Federal Reserve’s last Federal Open Market Committee (FOMC) meeting of the year. The statement and Chair Powell’s press conference take place Wednesday (Dec. 16). This will be an interesting meeting. On the one hand, the FOMC might offer some forward guidance about asset purchases, which may be that it will lengthen the maturities of its bond purchases. With inflation at the consumer and producer level still below the levels the Fed wants to see—namely 2%, although they would allow inflation to rise above that if necessary to get the economy moving—there’s no chance we will see any rate action. If there is any news, it probably will be nuanced, making Powell’s press conference important to watch. But it also is likely the FOMC will punt any guidance until after President-elect Biden’s inauguration.