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Weekly economic review & outlook
Fed policy on hold for the time being

DEC. 16, 2019

You Need to Know

Week in review

Fed on hold for December and beyond

The FOMC kept the federal funds rate unchanged while indicating an extended pause in monetary policy through 2020.

China trade deal, U.K. election, budget deal, and USMCA

It was a big week on the geopolitical front, but more clarity will be needed to determine the actual impacts on the economy and financial markets.

Week Ahead

Forecasts

Modest declines expected for housing starts and existing home sales

Housing starts and existing home sales are expected to see modest declines from October, in part from colder-than-normal weather.

Industrial production set for rebound

A rebound for industrial production is expected after it had its largest one-month decline since the Great Recession in October.

The Federal Reserve held steady in December and signaled an extended period of unchanged policy on interest rates. The FOMC statement and commentary from Chairman Powell made the case that the current range of 1.50-1.75 percent for the federal funds rate was appropriate to keep the economy on a stable growth path with inflation edging slowly higher to the Fed’s long-term 2.0 percent growth rate. The Summary of Economic Projections (SEP) has a consistent outlook for the economy with real GDP growth and inflation near 2.0 percent for both 2020 and 2021.

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