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June 2020 Fed Report

From the desk of Dan Seder, CFA, CMT, CFP®

Here's what the Fed reported today from June's FOMC meeting:

  1. Growth: The Fed projects the US economy will contract by 6.5% in 2020. The anticipated recovery of 5% in 2021 is not enough to get our economy back to pre-COVID levels.
  2. Interest Rates: The central bank expects rates to remain near zero through 2022. This is in stark contrast to last December's median rate forecast of 2.125% at the end of 2022.
  3. Fed Balance Sheet: According to CNBC, the Fed will continue buying bonds (Quantitative Easing) at a clip of $80B/month of treasuries and $40B/month of MBS (mortgage-backed securities). As a result, the Fed's balance sheet is at $7.2 trillion and expanding.