What’s in the Fed’s toolkit Janet? - ANZ

Research Team at ANZ, suggests that given the proximity of the policy rate to the zero lower bound (ZLB), the focus of Yellen’s discussion is likely to be on the unconventional policy measures at the Fed’s disposal.

Key Quotes

“Including: asset purchases (or the central bank’s balance sheet), forward guidance, negative rates, and funding for lending scheme. Should the need arise for further easing in the future, and rates remain near the ZLB, we expect forward guidance and asset purchases to be the tools of choice. Although Yellen is unlikely to rule out any option, recent Fed rhetoric suggests they are not comfortable with the use of a negative rate policy.”