PLANADVISER - September/October 2020 - 8
trends
The news that drives the retirement
plan adviser industry
Interest Rates' 'New Normal'
By bringing
longer-run goals
and strategy into
alignment with key
longer-run changes
in the economy,
the Federal Open
Market Committee
(FOMC), via its new
statement, aims
to strengthen
support for the
economic recovery
WATCHERS of
the Federal Open Market
Committee (FOMC) know its " Statement
on Longer-Run Goals and Monetary Policy
Strategy " articulates its approach to financial
policy and serves as the foundation for
its policy actions. Thus, a change to the
statement, however minor, is generally
viewed as a significant policy development.
In a speech given by Federal Reserve
Chair Jerome Powell, he said the latest
changes reflect the evolution in the
U.S. and global economies over the
past decade-and lessons learned in
conducting monetary policy since the
Great Recession. " The updated statement
is also intended to enhance the transparency,
accountability and effectiveness of
monetary policy, " Powell said.
During his speech, Powell observed
how the general level of interest rates has
fallen. He said estimates of the neutral
federal funds rate-i.e., the rate consistent
with the economy operating at full
strength and with stable inflation-have
fallen substantially. This,
in large part,
reflects a fall in the " equilibrium real
interest rate, " or " r-star, " he said.
Powell explained that this rate is not
affected by monetary policy, but instead
is driven by fundamental factors in the
economy, including demographics and
productivity growth-the same factors
that drive potential economic growth.
He noted that the new policy is largely
in response to the nearly 50% drop, since
2012, in FOMC participants' median estimate
of the neutral federal funds rate-
from 4.25% to 2.5%.
" This decline in assessments of the
neutral federal funds rate has profound
8 | planadviser.com September-October 2020 Art by Andrea D'Aquino
http://www.planadviser.com
PLANADVISER - September/October 2020
Table of Contents for the Digital Edition of PLANADVISER - September/October 2020
A Careful Inspection
2020 PLANADVISER Retirement Plan Adviser Survey
Keeping Clients Safe
Cures for Virtual Meeting Fatigue
Inflation Protection For DC Investors
How to Show Your Worth
Never Too Late
A Return to Rollover Advice
Whether—And How—To Vote Proxies
PLANADVISER - September/October 2020 - Cover1
PLANADVISER - September/October 2020 - Cover2
PLANADVISER - September/October 2020 - 1
PLANADVISER - September/October 2020 - 2
PLANADVISER - September/October 2020 - 3
PLANADVISER - September/October 2020 - 4
PLANADVISER - September/October 2020 - 5
PLANADVISER - September/October 2020 - 6
PLANADVISER - September/October 2020 - 7
PLANADVISER - September/October 2020 - 8
PLANADVISER - September/October 2020 - 9
PLANADVISER - September/October 2020 - 10
PLANADVISER - September/October 2020 - 11
PLANADVISER - September/October 2020 - A Careful Inspection
PLANADVISER - September/October 2020 - 13
PLANADVISER - September/October 2020 - 14
PLANADVISER - September/October 2020 - 15
PLANADVISER - September/October 2020 - 2020 PLANADVISER Retirement Plan Adviser Survey
PLANADVISER - September/October 2020 - 17
PLANADVISER - September/October 2020 - 18
PLANADVISER - September/October 2020 - 19
PLANADVISER - September/October 2020 - 20
PLANADVISER - September/October 2020 - 21
PLANADVISER - September/October 2020 - 22
PLANADVISER - September/October 2020 - 23
PLANADVISER - September/October 2020 - 24
PLANADVISER - September/October 2020 - 25
PLANADVISER - September/October 2020 - Keeping Clients Safe
PLANADVISER - September/October 2020 - 27
PLANADVISER - September/October 2020 - 28
PLANADVISER - September/October 2020 - 29
PLANADVISER - September/October 2020 - Cures for Virtual Meeting Fatigue
PLANADVISER - September/October 2020 - 31
PLANADVISER - September/October 2020 - 32
PLANADVISER - September/October 2020 - 33
PLANADVISER - September/October 2020 - Inflation Protection For DC Investors
PLANADVISER - September/October 2020 - 35
PLANADVISER - September/October 2020 - How to Show Your Worth
PLANADVISER - September/October 2020 - 37
PLANADVISER - September/October 2020 - Never Too Late
PLANADVISER - September/October 2020 - 39
PLANADVISER - September/October 2020 - 40
PLANADVISER - September/October 2020 - 41
PLANADVISER - September/October 2020 - A Return to Rollover Advice
PLANADVISER - September/October 2020 - Whether—And How—To Vote Proxies
PLANADVISER - September/October 2020 - 44
PLANADVISER - September/October 2020 - Cover3
PLANADVISER - September/October 2020 - Cover4
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