Historic Changes in US Monetary Policy
Marco Fragnito, Managing Principal | Robert R. Fragnito, Chief Operating Officer & Financial Advisor
Last week financial markets witnessed a historic announcement on the future of monetary policy in the United States. We want to emphasize in this alert the significance of Federal Reserve Chairman Jerome Powell’s speech on Thursday, August 27 at the annual Jackson Hole Symposium.
Powell laid out a new direction for the Fed in how it will perceive the impact of inflation on the US economy. The Fed’s new strategy puts more focus on labor market conditions over high inflation. Interest rates will remain low until inflation exceeds the Fed's 2% target threshold. This new framework responds to surprisingly low inflation averages over the past decade despite low interest rates, and large bond buying programs by the Fed.
We at MCF believe this is a positive development for financial markets and we will follow-up in the near-term with a more in-depth analysis on how this will impact portfolios for years to come.
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MCF Capital Management, LLC is an independent, family-run, financial advisory firm that manages investment portfolios for individuals and businesses through quantitative market data analysis.
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