Aside from acknowledging the weakness in the incoming economic data in the policy statement, we expect the Fed to leave its policy settings unchanged at next week’s FOMC meeting. The additional fiscal relief passed by Congress late last year, and the prospect of more stimulus soon, has led to speculation that a strong economic recovery could prompt the Fed to withdraw policy support sooner than previously anticipated. But we expect that Chair Jerome Powell will use his post-meeting press conference to push back on suggestions the Fed could taper its asset purchases any time soon.
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