Analysis of Fed and BOEs Monetary Policy Statements

Two key central banks in the world i.e. the US Federal Reserve and the Bank of England have announced their monetary policy decisions. The MPC of both the central banks have unanimously decided to hold policy interest rates. While the US Federal Reserve plans to continue with its liquidity infusion program at the current pace, the Bank of England has announced additional liquidity infusion measures of £150 bn going ahead.

Both the central banks believe that the outlook for both the economies is uncertain and the path of the economy will be contingent on the course of the virus. The reason for the uncertainty in the outlook is that in both the US and UK economy, a second wave of corona virus infections have partially stalled economic activities and have also led to the UK Parliament recently announcing a 1-month lockdown. The ongoing health crisis will continue to weigh on economic activities, employment and inflation in the near term and poses considerable risks to the economic outlook.