Monetary Policy Analytics focuses on the nexus between macro, policy, and market, culminating in predictions for monetary policy grounded in unparalleled senior policy experience and proprietary analytical tools.
For example, policy rules often capture the link between the incoming data and evolving forecast and monetary policy decisions.
Shifts in monetary policy strategy, as exemplified by the Fed’s Framework Review and new monetary policy framework, necessitates a closer look at the implications of that framework for the conduct of monetary policy and how their reaction function changed.
These additional services demonstrate MPA’s ongoing commitment to enhance understanding of monetary policy, providing our clients unparalleled expertise and greater customer choice. A complete understanding of U.S. monetary policy is imperative for the assessment of investment opportunities and we have been seeing consistently strong demand from a wide range of investment job functions.
Before each meeting, Larry writes the FOMC Briefing, our signature product. Using our senior policy experience and comprehensive analysis, the Briefing discusses economic developments their relevance for policymaking, and the likely outcomes and risks for policy conduct ahead.
As part of the Briefing, we provide an educated prediction of the FOMC’s post-meeting statement and, if applicable, their updated macroeconomic forecasts and policy rate projections. These items are often market movers and we have a track record for making accurate calls.
However, the link from monetary policy to the economy is not via changes in the short-term policy rate itself, but by its passthrough to the entire yield curve and risk-taking appetite. The link from monetary policy to the broader financial market is covered often and in-depth, bearing in mind the likely implications for investment policy.
Central to that discussion has been the Fed’s asset purchases. To that end, we offer an update of the Fed’s balance sheet update weekly as part of our effort to provide consistent service on balance sheet policy.
But anticipating near-term policy actions requires more than understanding the strategy and applying simple policy rules. Indeed, the most important signal of impending policy comes in both official FOMC communications and policymakers’ speeches, which we analyze both individually and in the context of their umbrella communications strategy.
Our FOMC commentaries provides anticipatory and retrospective analysis on every aspect of the FOMC cycle, including but not limited to FOMC statements, dot plots, forecasts, press conferences, testimonies, and key speeches. By doing so, we offer an unparalleled view of Fed strategy and discern policy pivots and market risks well ahead of time.
Our Weekly Update, also extracts recurring themes and tensions within the Committee.
Our written product only scratches the surface of what we offer though. Our greatest strength is the ad hoc analysis provided upon request and on a confidential basis. Our clients benefit from frequent exchanges via phone or email. Our analysis is highly sought after and we are often asked to present confidentially related topics to investment committees and external audiences worldwide.
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