BOFA Research Head on Fed Decision

The video discusses the Federal Reserve's approach to managing inflation and interest rates. Powell emphasizes patience, suggesting that rate hikes will not occur until tapering is complete. The Fed aims to avoid market disruptions by providing clear guidance. Inflation expectations are crucial in determining the pace of tapering. The yield curve may steepen slightly, but the Fed prefers a gradual approach. Risk assets have responded positively to the Fed's patient stance, though potential risks remain if inflation expectations rise unexpectedly.

What are the potential risks to credit and equities mentioned in the discussion?

How does the Fed's approach to tapering reflect its overall monetary policy strategy?