Here’s an additional reason to be thankful for the independence of the Federal Reserve. Since the Fed does not receive funding through the congressional budgetary process and is largely self-funded through the interest on its massive government securities portfolio, plus its many other activities, we don’t have to worry that this week’s Federal Open Market Committee meeting will fall victim to the partial government shutdown.
But how much will actually happen at the meeting that can be expected to move the financial markets?
One thing we do know is that Fed Chair Jerome Powell will hold a press conference after the meeting ends at 2:00 EST. Last summer Powell announced that he will hold a presser at the end of each of the Fed’s 10 scheduled meetings, not just every three months.
But it’s unlikely that the Fed will raise interest rates at the meeting, after Powell largely put the kibosh on that idea late last year, when under extraordinary pressure from President Trump and just about everyone investor within reach of a microphone he and his Fed colleagues surrendered and said “no mas” to any more monetary tightening for a while. Continue reading "Shutdown Or Not, The Fed Abides"
