The Federal Reserve has published a supporting document that effectively records the transition to a new stage of monetary policy. The central signal was the launch of the quantitative easing program, which significantly alters the balance of power in financial markets.
1. Launch of QE and its impact on liquidity
The Fed announced its intention to buy treasury bills worth $40 billion within the next 30 days. The official launch of the new QE cycle is scheduled for December 12, which means a direct increase in demand for government debt instruments and overall — an influx of liquidity into the system.
This decision often precedes periods of market revitalization and reduced volatility, but at the same time creates risks for inflation dynamics.
2. Economic activity: moderate growth
The Fed maintains its economic growth forecast at 1.7% in 2025 and around 2.3% in 2026. The pace of economic expansion remains subdued, corresponding to a 'soft' development scenario without sharp overheating and non-recessionary breakouts.
3. Labor market: signs of cooling
The regulator notes a gradual slowdown in the labor market. Throughout the year, the pace of new job creation has decreased, and the unemployment rate has risen and stabilized at 4.5%.
The Fed emphasizes: the state of the labor market remains one of the key variables in determining the trajectory of future rate decisions.
4. Inflation: a distant path to the target of 2%
Inflationary pressure remains elevated. Since the beginning of the year, indicators have increased, and inflation PCE, according to Fed estimates, will remain at 2.9% in 2025, with the core rate at 3.0%.
The target of 2.0% is expected only by 2028, indicating long-term rigidity in monetary policy, despite the current launch of QE.
5. Rate expectations
The Fed predicts minimal changes in the trajectory of the rate:
2026 — one decrease of 25 bps.
2027 — another decrease of 25 bps.
The regulator underscores: the pace of declines will directly depend on inflation, wage dynamics, employment, financial conditions, and geopolitical factors.
6. Financial stability and risks
The Fed notes increased attention to the stability of the financial system. The balance of risks remains two-sided, however, the regulator identifies the labor market as a significant area of weakness.
In the event of unforeseen circumstances, the Fed is ready to promptly adjust its policy, demonstrating the preservation of an adaptive approach.
7. Long-term target of the Fed
Despite the change in tactics, strategic guidelines remain unchanged:
maximum employment,
stable inflation near 2%.
The launch of QE is not a rejection of the fight against inflation, but a technical solution for managing liquidity, aimed at reducing tension in the debt instrument market and ensuring a smooth transition to the next macroeconomic cycle.
