April 28th FOMC Follow-Up

Share this Post:

Share on facebook
Share on twitter
Share on linkedin
Share on email

Rates

  • Today the FOMC voted to keep the Fed Funds target rate unchanged within the 0.00% to 0.25% range.
  • This outcome was widely expected, and the committee members voted unanimously in favor of the action.

Inflation

  • Language around the Fed’s average inflation-targeting approach remained unchanged from recent meetings, again noting the Fed will “aim to achieve inflation moderately above 2 percent for some time…”
  • The Fed’s statement removed language regarding the health crisis weighing on inflation. The statement also noted that inflation has risen, but largely attributed this to transitory factors. As discussed further in the Press Conference, these transitory factors are primarily base effects, very low March and April numbers from last year falling off the 12-month calculation, and supply chain bottlenecks, issues that by their nature are temporary and expected to be resolved, although the timing for resolving these issues is uncertain.
  • In the Q&A following Chairman Powell’s prepared remarks, Powell indicated that breakeven rates are at levels that are consistent with their mandate, however the Fed will adhere to their stated objectives and not react based on a single data point or estimates.

Monetary Policy Implementation

  • There were no changes to the language surrounding asset purchases, which will continue at the previously established levels of $80 billion per month for Treasury securities and $40 billion per month for agency mortgage-backed securities.
  • Throughout the Press Conference, Powell repeatedly stated that it is not time for tapering yet and that it will likely take some time before they see substantial further progress. Powell clarified that while recent reports have been good, they “don’t come close to substantial further progress.”

Economic Conditions

  • Today’s statement continued to highlight the strengthening economy but noted that the “health crisis continues to weigh on the economy, and risks to the economic outlook remain.”
  • During the Press Conference, Powell stated that the labor market has continued to improve, notably in pandemic-hit areas such as leisure and hospitality.

The FOMC is next scheduled to meet June 15 – 16, 2021. The June meeting will include an updated summary of economic projections.

Disclosures

The views expressed herein are those of Asset Consulting Group (ACG). They are subject to change at any time. These views do not necessarily reflect the opinions of any other firm.

This report was prepared by ACG for you at your request. Although the information presented herein has been obtained from and is based upon sources ACG believes to be reliable, no representation or warranty, express or implied, is made as to the accuracy or completeness of that information. Accordingly, ACG does not itself endorse or guarantee, and does not itself assume liability whatsoever for, the accuracy or reliability of any third party data or the financial information contained herein.

Certain information herein constitutes forward-looking statements, which can be identified by the use of terms such as “may”, “will”, “expect”, “anticipate”, “project”, “estimate”, or any variations thereof. As a result of various uncertainties and actual events, including those discussed herein, actual results or performance of a particular investment strategy may differ materially from those reflected or contemplated in such forward-looking statements. As a result, you should not rely on such forward-looking statements in making investment decisions. ACG has no duty to update or amend such forward-looking statements.

The information presented herein is for informational purposes only and is not intended as an offer to sell or the solicitation of an offer to purchase a security.

Please be aware that there are inherent limitations to all financial models, including Monte Carlo Simulations. Monte Carlo Simulations are a tool used to analyze a range of possible outcomes and assist in making educated asset allocation decisions. Monte Carlo Simulations cannot predict the future or eliminate investment risk. The output of the Monte Carlo Simulation is based on ACG’s capital market assumptions that are derived from proprietary models based upon well-recognized financial principles and reasonable estimates about relevant future market conditions. Capital market assumptions based on other models or different estimates may yield different results. ACG expressly disclaims any responsibility for (i) the accuracy of the simulated probability distributions or the assumptions used in deriving the probability distributions, (ii) any errors or omissions in computing or disseminating the probability distributions and (iii) and any reliance on or uses to which the probability distributions are put.

The projections or other information generated by ACG regarding the likelihood of various investment outcomes are hypothetical in nature, do not reflect actual investment results and are not guarantees of future results. Judgments and approximations are a necessary and integral part of constructing projected returns. Any estimate of what could have been an investment strategy’s performance is likely to differ from what the strategy would actually have yielded had it been in existence during the relevant period. The source and use of data and the arithmetic operations used for calculating projected returns may be incorrect, inappropriate, flawed or otherwise deficient.

Past performance is not indicative of future results. Given the inherent volatility of the securities markets, you should not assume that your investments will experience returns comparable to those shown in the analysis contained in this report. For example, market and economic conditions may change in the future producing materially different results than those shown included in the analysis contained in this report. Any comparison to an index is for comparative purposes only. An investment cannot be made directly into an index. Indices are unmanaged and do not reflect the deduction of advisory fees.

This report is distributed with the understanding that it is not rendering accounting, legal or tax advice. Please consult your legal or tax advisor concerning such matters. No assurance can be given that the investment objectives described herein will be achieved and investment results may vary substantially on a quarterly, annual or other periodic basis. There is no representation or warranty as to the current accuracy of, nor liability for, decisions based on such information.Gryphon Financial Partners shall not in any way be liable for claims and make no expressed or implied representations or warranties as to their accuracy or completeness or for statements or errors contained in or omissions from them. This was created for informational purposes only. Gryphon Financial Partners, LLC is an Investment Adviser

Share this post:

Share on facebook
Share on twitter
Share on linkedin
Share on email

Leave a Reply

Your email address will not be published. Required fields are marked *

This website uses cookies to ensure you get the best experience.  Learn more

Skip to content