June FOMC review: the talk of talk of tapering has begun

At its June meeting, the Fed kept the federal funds rate unchanged, in line with market expectations. However, the markets were a little surprised by the 5 bp hike in the interest rate on excess reserves (IOER) and the reverse repo program (RRP). The Fed described the hike in those rates as a technical move to push up short-term rates further above zero. There was little change in the FOMC  statement . The only notable change was a small tweak to the inflation sentence, acknowledging the recent surge in inflation. However, the Fed continued to describe inflation as transitory. There was a significant change in the  dot plot ...

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