On the November FOMC

The FOMC statement was virtually unchanged from September. The Fed’s special pandemic emergency lending programs remain underutilized. Both are signs that economic conditions have normalized. Powell once again emphasized the importance of controlling Covid-2019, and the desirability of further fiscal stimulus. The only matter of importance in the press conference was Powell’s statement that the FOMC is considering extension beyond year-end of the termination of the special lending programs, and that he is in discussions with the Treasury about it. If no fiscal stimulus is forthcoming in the lame duck session of Congress, we expect most or all of the programs will be extended.