John Williams of the New York Fed has said that a loss of fiscal support could slow the economy in the coming months.
“I am optimistic about the news about vaccines and see the aid as a bridge.”
“The Fed is fully aware that it only met its inflation target briefly and that is why it introduced a new framework.”
“Pressures to generate low inflation have become dominant in the world economy.”
“The Fed believes it can keep pushing to improve the labor market without having high inflation.”
“There have been an enormous amount of difficulties, but the data also shows an increase in the creation of small businesses.”
The last meeting of the Federal Reserve did little to affect the currency space, as the concentration occurred elsewhere with the US elections.
However, the next meeting will be much more attractive to investors.
“Powell’s focus on COVID and more needs for fiscal stimulus highlight part of the tactical concern of chasing a weaker USD from current levels,” explained analysts at TD Securities.