Fed expected to cut rates next week before hitting pause button
The Fed has already lowered rates twice this year, in July and September, not because officials forecast a steep downturn but because the risks of such a slump have mounted.
The Fed has already lowered rates twice this year, in July and September, not because officials forecast a steep downturn but because the risks of such a slump have mounted.
The Federal Reserve finds itself in an unusually delicate spot as it considers how much more to try to stimulate an economy that’s still growing and adding jobs but also appears vulnerable.
The Federal Reserve cut its key benchmark interest rate while saying it’s prepared to continue doing what it deems necessary to sustain the U.S. economic expansion.
Several factors will influence the Fed’s decisions in the coming months on whether it needs to keep reducing borrowing rates to try to help sustain the U.S. economic expansion now in its 11th year.
Federal Reserve Chairman Jerome Powell had barely finished speaking to central bankers in Jackson Hole, Wyoming, before President Donald Trump escalated his attacks on the Fed, which he has repeatedly accused of keeping rates too high.
Against the backdrop of a vulnerable economy, Federal Reserve Chairman Jerome Powell takes center stage Friday with the financial world seeking information on whether last month’s first Fed rate cut in a decade likely marked the start of a period of easier credit.
President Trump said that the Fed’s high level of interest rates in comparison to other countries was keeping the dollar too strong and making it more difficult for U.S. manufacturers to compete.
The rate reduction was the first since December 2008, when the Fed dropped its benchmark effectively to zero as it battled recession and financial crisis.
Under Chairman Jerome Powell, the Fed has faced pressure to ease credit since it raised its key rate in December for the fourth time in 2018 and hinted that additional rate increases were likely this year.
Delivering the central bank’s semiannual report to Congress, Federal Reserve Chairman Jerome Powell said that since Fed officials met last month, “uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”
Federal Reserve Chairman Jerome Powell said that the downside risks to the U.S. economy have increased recently, reinforcing the case among policy makers for somewhat lower interest rates.
In its statement Wednesday, the Fed removed a reference to being “patient” about adjusting rates. That suggested that the Fed is now inclined to begin cutting rates for the first time in more than a decade. It remains unclear when that might happen.
Economists say when—or even whether—the Fed eases credit this year will depend on a host of factors that are hard to predict.
President Donald Trump said he thinks economic growth and stock market indexes would be substantially higher if the Federal Reserve hadn’t raised interest rates so much.
Expectations are rising that the Fed will cut rates at least once and possibly twice before year's end, in part because of the consequences of the trade war.
The Federal Reserve signaled that no rate hikes are likely in coming months amid signs of renewed economic health but unusually low inflation.
The Federal Reserve this week will likely reinforce a theme that has cheered consumers and investors since the start of the year.
In a broadcast interview, Trump said without the Fed’s rate hikes last year and moves to trim its bond holdings, the economy would have grown by more than 4 percent.
The monetary policy body on Wednesday left its key interest rate unchanged and projected no rate hikes in 2019, reflecting a dimmer view of the economy as growth weakens in the United States and abroad.
The message the Federal Reserve is poised to send when its latest policy meeting ends this week is a soothing one. It reflects an abrupt shift in tone since the start of the year.