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Essentials of Monetary Policy

Federal Reserve (Fed). The Fed Stays the Course and Will Continue to Support the Economy and Markets

December 16, 2020
François Dupuis • Mathieu D’Anjou • Francis Généreux • Hendrix Vachon

News about the pandemic and the economy changes daily. Sometimes the news is good (vaccines) and sometimes it’s more negative (new wave of cases, new public health restrictions and drops in certain indicators). However, despite the latest economic, financial, political and health-related developments,  Fed leaders won’t be changing their stance. The statement released today offered virtually nothing new compared to the one released in November. The only change was a restatement of the amounts of the Fed’s monthly securities purchases and, more importantly, a new forward guidance about maintaining the status quo until the Fed is satisfied with improvements conference, Fed Chair Jerome Powell signalled that “the monetary policy will continue to deliver powerful support to the economy until the recovery is complete.”