Financial Markets Daily Report
28 agosto 2020

Markets were mixed in yesterday's session as the Fed and its Chairman Jerome Powell announced a change to the longer-run goals and monetary policy strategy. Volatility rose and stocks declined moderately across AEs and EMs.

icones_financial-markets-daily-reports
  • Markets were mixed in yesterday's session as the Fed and its Chairman Jerome Powell announced a change to the longer-run goals and monetary policy strategy. Volatility rose and stocks declined moderately across AEs and EMs.
  • As it concluded a strategic review that had started in 2018, yesterday the Fed adjusted its long-run inflation goal to "inflation that averages 2% over time", implying that it will temporarily aim at inflation moderately above 2% after periods of persistent inflation shortfalls. Also, the Fed now emphasizes "maximum employment" as a broad-based and inclusive goal, and the labor market will be assessed in terms "shortfalls" from this goal (before: "deviations").
  • In fixed-income markets, the U.S. sovereign yield curve steepened amid expectations that the Fed will tolerate periods of moderately higher inflation. Euro area sovereign yields and FX markets were little changed.
  • The second estimate of U.S. Q2 GDP figures showed that activity had collapsed by -9.1% qoq (flash estimate: -9.5%).
Etiquetas