The June FOMC was seen as dovish. Many..........>

FED: The June FOMC was seen as dovish. Many analysts (we read 25 notes)

highlighted the unusually flat dot plot, and Powell's comment "we're not even

thinking about thinking about raising rates" while downplaying May's jobs report

and noting that prior to COVID the Fed failed to meet its inflation goals.

- The economic projections were not seen as a huge surprise, but some noted

longer-run dot staying steady at 2.5% (vs expectations of a drop), and the

long-term #s not reflecting expected permanent damage from the COVID crisis.

- The meeting did not result in any analyst changing their view on what policies

will eventually be adopted by the Fed, with Yield Curve Control and strengthened

Forward Guidance still seen as likely likeliest outcomes.

- But while some previously saw the Fed adopting such policies as soon as July,

September now seems overwhelming consensus. Also, the communications on YCC were

interpreted differently: some saw the inclusion of YCC in Powell's opening

statement as making its eventual adoption appear more likely (e.g. Citi), but

others saw it less likely given he said it "remains an open question".

- Summary table: https://emedia.marketnews.com/jun20postfomc.PNG