On the June FOMC

While some might be disappointed by no indication that much-discussed “yield curve control” is coming – or any other policy innovations, for that matter – today’s steady-as-she-goes FOMC was ideal for maintaining confidence. Since the Fed’s massive new lending programs barely have any uptake yet anyway, why create uncertainty by introducing entirely new policy initiatives without evidence they are needed? The FOMC displayed encouraging unanimity with the “dot-plots,” showing a near-zero policy rate through 2021, and only two brave members expecting a hike in 2022. After a 47% equity market rally from the March lows, it’s time for a breather in risk assets no matter what the Fed might have said today.