The Federal Reserve ended its two-day Federal Open Market Committee meeting yesterday and there were some notable shifts to monetary policy, although these shifts were largely expected by markets.
When does transitory inflation become non-transitory? That is the question that Federal Reserve Chair Jerome Powell is likely to be under increasing pressure to answer after the most recent inflation data surged past economists’ expectations.
The Federal Reserve ended its two-day meeting yesterday and, as expected, there were no changes to current interest rate or bond purchasing policies. However, the Fed continues to prepare the market for a reduction of bond purchases soon to begin.
Inflation seems to be on the rise, but we believe there are good reasons to think it will be transitory.
The outstanding fourth-quarter earnings season we had in 2020 is a tough act to follow, but 2021’s first quarter has the makings of another potentially great earnings season.
Treasury yields started moving sharply higher this past month (remember that as yields go up, prices go down). And while the upward march began in earnest last August when the 10-Year Treasury yield bottomed at an all-time low rate of 0.50% based on closing prices, the past week we saw the 10-year break through the 1.25% threshold and touch 1.35%, a new high for the year.
