The Fed’s new average inflation framework implies that more stimulus measures are on the way, but it isn’t clear if officials will be ready to make wholesale changes at next week’s FOMC meeting. Nevertheless, the accompanying statement should at least emphasise that rates will not be raised until the 2% inflation target has been achieved “on a sustained basis”, with the updated economic projections likely to indicate that won’t happen until 2024 at the earliest.

Read the publication Fed’s actions will speak louder than its words on the Capital Economics Website.

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