Fed Saw July Rate Cut as Insurance for Growth and Inflation
Thursday, 22 August 2019 01:24 WIB | FISCAL & MONETARY |Federal ReserveThe FedEkonomi AS

Federal Reserve officials viewed their interest-rate cut last month as insurance against too-low inflation and the risk of a deeper slump in business investment stemming from uncertainty over President Donald Trump™s trade war.

œMembers who voted for the policy action sought to better position the overall stance of policy to help counter the effects on the outlook of weak global growth and trade policy uncertainty, insure against any further downside risks from those sources, and promote a faster return of inflation to the 2% target, according to minutes of the July 30-31 Federal Open Market Committee meeting, released Wednesday in Washington.

The Fed cut rates for the first time since 2008, a move Chairman Jerome Powell called a œmid-cycle adjustment. The minutes described the quarter-point cut as part of an œongoing reassessment of the policy path that began in late 2018.

 œMembers generally agreed that it was important to maintain optionality in setting the future target range for the federal funds rate, the minutes said, indicating the committee didn™t view the cut as part of an extended cycle of reductions.

The Fed went out of its way to highlight the reasons for the cut in three bullet points, citing signs of economic deceleration, risk management concerns and too low inflation. The minutes said participants noted that œtrade uncertainty would remain a persistent headwind for the outlook.

FOMC participants said they still viewed a sustained U.S. economic expansion, strong labor markets and inflation near the target œas the most likely outcomes.

The minutes began with a lengthy discussion of the Fed™s policy strategy review, which indicated that officials aren™t ruling out any options, including an expansion of their policy toolkit.

Since the last meeting, the dollar has strengthened as the global economic outlook dimmed, raising the prospect for rate cuts abroad. Yields on U.S. 10-year Treasury notes have plunged toward record lows. Investors expect as many as three more quarter-point rate cuts this year to offset increasing downside risks, including a move next month.

Source : Bloomberg

RELATED NEWS

Fed officials more upbeat about the economic outlook this year, minutes show
Thursday, 20 February 2020 02:35 WIB

Federal Reserve officials and the central bank™s staff said the U.S. economy seemed stronger in late January than they had expected, according to minutes of their late-January meeting released Wednesday. The risks to the outlook were more favorable than had appeared at their meeting in mid-Decemb...

RBA Reviewed Case for Further Rate Cut, Worried About Borrowing
Tuesday, 18 February 2020 08:02 WIB

Australia™s central bank reviewed the case for a further interest-rate cut, but decided against it in order to avoid encouraging additional borrowing as house prices climb, minutes of its Feb. 4 meeting in Sydney showed. The Reserve Bank also expects the coronavirus outbreak to œsubtract from g...

Fed Chair Powell: Ready to use QE, guidance œaggressively in a downturn, USD stable
Wednesday, 12 February 2020 22:41 WIB

Jerome Powell, Chairman of the Federal Reserve, has said that the bank is ready to use Quantitative Easing (QE) and also forward guidance "aggressively" in a downturn. Powell is testifying before the Senate's Banking Committee in Washington. The US dollar has been edging higher alonside higher bond...

Carney Speech: Low Interest Rate Environment Adds to Government's Fiscal Capacity
Tuesday, 11 February 2020 23:02 WIB

The low interest rate environment adds to the government's fiscal policy, Bank of England (BoE) Governor Mark Carney said on Tuesday in his speech before the Economic Affairs Committee. "Low interest rate environment is putting some pressure on UK bank margins but should be kept in perspective," Car...

Lagarde speech: Inflation Remains Some Distance Below Our Medium-Term Aim
Tuesday, 11 February 2020 21:25 WIB

The growth momentum of the euro area has been slowing down since 2018 dur to global uncertainties and weaker international trade, European Central Bank (ECB) President Christine Lagarde said in her prepared remarks at the European Parliament's plenary session. "Moderating growth has also weakened p...

ANOTHER NEWS
Hong Kong Stocks Close Lower on Virus Worries (Review)
Saturday, 22 February 2020 04:19 WIB Hong Kong stocks closed sharply lower Friday as the rising toll from the deadly coronavirus outside China fanned fears the epidemic's impact on earnings and economic growth could be worse than anticipated. The Hang Seng Index fell 1.1 percent, or...

DISCLAIMER

Seluruh materi atau konten yang tersaji di dalam website ini hanya bersifat informatif saja, dan tidak dimaksudkan sebagai pegangan serta keputusan dalam investasi atau jenis transaksi lainnya. Kami tidak bertanggung jawab atas segala akibat yang timbul dari penyajian konten tersebut. Semua pihak yang mengunjungi website ini harus membaca Terms of Service (Syarat dan Ketentuan Layanan) terlebih dahulu dan dihimbau untuk melakukan analisis secara independen serta memperoleh saran dari para ahli dibidangnya.