Fed takes first steps to strengthen forward guidance

The Fed left its policy stance broadly unchanged at the conclusion of today’s FOMC meeting, but it did strengthen its forward guidance a little – by publishing interest rate projections that show nearly all officials believe the fed funds rate will still be at near-zero in two-and-a-half years’ time. Fed Chair Jerome Powell also hinted in his post-meeting press conference that the Fed was seriously discussing imposing explicit caps on Treasury yields although, with those yields currently at very low levels, officials are in no rush to adopt such a policy.