Bank of America Breaks Down the Next Two Steps the Fed Will Take to Stimulate the Coronavirus-Addled Economy

The Federal Reserve is poised to implement stricter forward guidance and yield-curve control in September as the US economic rebound faces new challenges, Bank of America said Tuesday.

by Ben Winck
Business Insider

The Federal Reserve is set to issue more stimulus throughout the year to guide the nation’s rebound from the coronavirus crisis, Bank of America said Tuesday.

Economic reopening will lift the US from its second-quarter trough, but the central bank will turn to new policy actions once lingering challenges emerge, strategist Mark Cabana and economist Michelle Meyer wrote in a note. The firm expects the Fed to use a “one-two punch” of forward guidance and yield-curve control come September to facilitate a steady recovery.

The central bank will likely announce rates will remain near zero for a specific period of time or until price stability is achieved, the team wrote.

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