The Fed left rates unchanged in its last meeting before the 2020 presidential election in November. It also indicated rates were unlikely to rise until at least 2023. Three experts weigh in on what the Fed decision means.
before the 2020 presidential election in November. It also indicated rates were unlikely to rise until at least 2023.David Kelly, chief global strategist at JPMorgan Asset Management, said this is unprecedented stimulus.
"I don't think we truly appreciate just how much things have changed over the last year. I mean, up until this point throughout the entire recovery from the Great Financial Crisis, we were trying to get there just through lower interest rates alone. And frankly, you know, low long-term interest rates aren't going to stimulate anything. But now what we're doing is essentially monetizing the debt.
Mona Mahajan, U.S. investment strategist at Allianz Global Investors, sees favorable conditions for the market. "I think this is a case of 'Don't fight the Fed.' We have low rates now at least through 2021, probably through 2022 as well until we get a real tried-and-true recovery, real signs of inflation picking up in that backdrop in this low-rate environment. The TINA effect — there is no alternative — comes front and center. That means areas like equities, parts of the credit markets, even gold, as we mentioned earlier, all could be supported over the next few months, few quarters.
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