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MNI Fed Preview - December 2020: Reasons To Wait

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MNI Fed Preview - December 2020: Reasons To Wait

By Tim Cooper

The FOMC is likely to adopt new guidance on asset purchases at the December FOMC, but will fall short of adjusting its purchase program in either scope or size, preferring to wait for further clarity over the outlook before taking such a step.

While an increase in the weighted average maturity of the Fed's asset purchases is not the consensus outcome from this meeting, it is expected by some market participants – setting up the potential for a hawkish disappointment on Wednesday.


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FedPrevDec2020.pdf





Analyst Views - Fed Outlook

  • Based on a review of 25 sell-side previews of the December FOMC meeting, it is clear consensus (and indeed all but unanimous) that the Fed will introduce new "qualitative, objective-based" guidance for its asset purchase program.
  • But opinion is split on whether the Fed will deliver a change in the asset purchase program itself in Dec.


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