• Yash Chauhan, Analyst, Global Capital Markets at Validus Risk Management


• 04.11.2021 09:45 am
#RiskManagement

Commenting on the market reaction to the Fed’s monetary policy statement, Yash Chauhan - Analyst, Global Capital Markets, at Validus Risk Management, said: “The Fed statement was exactly in line with market expectations, acknowledging that ‘substantial further progress’ had been made towards maximum employment and price stability to warrant tapering starting November but stopped short of giving any timeline in terms of lift-off in rates.

“One significant change in the statement was that the Fed now believes that factors contributing to elevated inflation are 'expected' to be transitory, supporting the market’s view that supply chain disruptions could persist well into next year.

“Powell emphasized the dual mandate of price stability and maximum employment, and said that rate lift-off would only occur once the latter had been reached.

“As expected, Powell refrained from sharing any numerical anchor to measure maximum employment and said that the Fed measures it using a wide range of figures, effectively keeping some wiggle room to adjust policy as required.”