Fed Leaves Rates Unchanged, Dots Plots Signal Rate Increases After 2020 (Inflation Still Below Fed’s Target)

Today, the Federal Reserve’s Open Market Committee (FOMC) met and revealed … no change to rates. BUT are willing to cut more than 25 basis points at the upcoming meeting on July 31 (more flexibility).

fednochange

The FOMC’s Dots Plot (where members think rates will be in the future) is expected to rise after 2020. (Thanks to Rudy Havenstein!)

feddotsssssss

The economy is generating only 1.5% core inflation, below The Fed’s target rate of 2%.

fedinflaton.png

On the announcement of no rate cuts and a possible rate cut of 50 basis points in July, both the 10-year and 2-year Treasury yields declined.

10-year Treasury Note.

ust10grf.png

2-year Treasury Note.

ut2fed

Fed Funds volatility surface?  Looks like a Tsunami!

fedf30.png

Where is the inflation??

hardy20

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.