CBC Partners with Stifel Financial Corp. to Explore Recent Fed Rate Announcements

Provided By: Lindsey M. Piegza, Ph.D., Chief Economist 

“Fed Holds Rates Steady, Signals Ongoing Patience and an End to Balance Sheet Reduction”

Earlier this week, in a widely anticipated decision, the Fed opted to hold rates steady.  In a somewhat unexpected move, however, the Committee eliminated an expectation for further policy action on the Fed funds rate this year, while reducing the outlook for growth and inflation.  Amid rising risks of a slowdown overseas, as well as intensifying weakness in domestic economic data, the Fed appears relatively comfortable with policy action already taken over the last few years.  Thus, reiterating January’s “patient” tone, this week the Fed all but committed to an indefinite position on the sideline.  Although current policy is presumably near or at a neutral level, according to Fed officials, downside risks are likely to shift the Fed to a defensive position sooner than later.  At such point, the question will become how much and what type of monetary support is needed to stave off an economic contraction?  

The full report is available here.

Stifel Financial Corp. is a diversified financial services holding company that conducts its business through several wholly owned subsidiaries. Its primary broker-dealer subsidiary, Stifel, Nicolaus & Company, Incorporated, is a full-service brokerage and investment banking firm established in 1890. Stifel Financial Corp. was formed as a holding company in July 1983 and is publicly traded on the New York Stock Exchange under the symbol "SF."