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Essentials of Monetary Policy

Federal Reserve (Fed). The Fed Is Not Yet Ready to Adjust Its Monetary Policy

April 28, 2021
François Dupuis • Mathieu D’Anjou • Francis Généreux • Hendrix Vachon

Despite the fact that most economic indicators have performed very well since the March meeting, it was quite clear that Fed leaders would not show much openness today to an impending change in their monetary policy. They note, of course, that the situation has improved, but reiterate that the recovery is far from complete and that the economy will have to show “substantial further progress” before they begin to lay the groundwork for a reduction in asset purchases. Unsurprisingly, Jerome Powell repeated that the labour market still had a considerable shortfall. The Fed also reaffirmed that, in its opinion, higher inflation rates will be temporary