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A Thread on FED Monetary Policy Announcement happened Yesterday:
The monetary policy meeting of the central bank of the US, i.e., FED got concluded yesterday and a lot of things came out from that. Why is this significant to us? Isn’t only RBI’s monetary policy relevant to us? – FED monetary policy is relevant to us as much as RBI’s because we live in an interconnected world and with all the globalization, every economy is interlinked with others.
There are multiple takeaways from yesterday’s meet:
1. FED kept the interest rate at an all-time low, i.e., 0% to 0.25%.
2. Since the onset of the pandemic, FED's objective was to stimulate growth in the economy with whatever they have at their disposal. Now their stance has changed from Growth to Inflation. Till now, FED's Chairman Jerome Powell addressed inflation as TRANSITORY but now they have accepted it as STRUCTURAL. They stated that growth is not the concern anymore and Employment has reached the natural rate of employment.
The monetary policy meeting of the central bank of the US, i.e., FED got concluded yesterday and a lot of things came out from that. Why is this significant to us? Isn’t only RBI’s monetary policy relevant to us? – FED monetary policy is relevant to us as much as RBI’s because we live in an interconnected world and with all the globalization, every economy is interlinked with others.
There are multiple takeaways from yesterday’s meet:
1. FED kept the interest rate at an all-time low, i.e., 0% to 0.25%.
2. Since the onset of the pandemic, FED's objective was to stimulate growth in the economy with whatever they have at their disposal. Now their stance has changed from Growth to Inflation. Till now, FED's Chairman Jerome Powell addressed inflation as TRANSITORY but now they have accepted it as STRUCTURAL. They stated that growth is not the concern anymore and Employment has reached the natural rate of employment.
