Fed Thoughts

Silence in the Mountains

Fed Thoughts White Paper
January 2020

Authors & Contributors

Chief Economist Vincent Reinhart considers the likelihood of the Fed remaining on the sideline during 2020.

According to the median Federal Open Market Committee (FOMC) participant, the cumulative 75-basis-point easing in 2019 puts the current nominal fed funds rate 75 basis points below its equilibrium level. Leaving this accommodation in place for the duration of 2020 is the right place to keep the economy in a good place—with real GDP growth a touch beyond its potential and pressures on resources only slowly sending inflation higher toward the FOMC’s goal of 2 percent.