Breaking Up With ZIRP is Hard To Do

October 2015

What’s Inside

Citing the potential drag from global economic and financial developments, the Fed maintained its ZIRP (Zero Interest Rate Policy) at the FOMC meeting.
Whether or not the Fed decides to raise the fed funds target rate in 2015, forecasts for the pace of tightening and terminal levels suggest lower and slower tightening
Declining inflation and weak demand constrain what a neutral fed funds target rate may be.
In many ways, current market conditions suggest a tightening has already occurred, without any action from the Fed.