admin July 11, 2019


Bloomberg News/Landov


Fed Chairman Jerome Powell arrives for a Fed board meeting earlier this year.

Minutes of the Federal Reserve’s June meeting added to the sense that the central bank is prepared to cut interest rates at their meeting at the end of this month.

According to the summary of the June discussions, released Wednesday after a three-week lag, “many” Federal Reserve officials said they would be willing to cut interest rates if risks and uncertainties “continued to weigh on the economic outlook.”

And that is exactly how the economy has performed, according to Fed Chairman Jerome Powell, in testimony before Congress earlier Wednesday.

Powell testified Wednesday before the House Financial Services Committee. He is set to go before the Senate Banking Committee at 10 a.m. Thursday.

In remarks widely seen as dovish, he said that the economy has not picked up since the Fed meeting and repeated the Fed is ready to act as needed to support demand.

Economists were already pretty certain about a July rate cut after the Fed chairman told lawmakers the risks were weighing on the outlook and he repeated the central bank was prepared to act as needed to spur demand.

The minutes just show that Powell has the backing of most Fed officials for a move.

Officials decided not to cut rates in June because the deterioration in the outlook was “quite recent.”

Instead, they removed prior language saying that they would be “patient” about interest rates and said they “will act as appropriate to sustain the expansion.”

Read: Fed holds rates steady, gives itself wiggle room

St. Louis Fed President James Bullard had dissented in favor of an immediate rate cut.

According to the minutes, only “some” Fed officials argued there was not yet a “strong case” for a rate cut.

“A few” officials expressed the view that a rate cut might overheat the labor market and fuel financial imbalances.

Many on Wall Street have been wondering aloud what a rate cut would do to help the economy.

The minutes show that officials discussed this question and saw several reasons for a policy easing.

Several officials viewed a near-term cut in rates was good risk-management because it “could help cushion the effects of possible future adverse shocks to the economy.”

Many others argued a policy easing might help boost inflation, which has remained below the central bank’s 2% target.

Read: Live blog of Powell’s testimony

Stocks closed higher in the wake of Powell’s remarks, with the Dow Jones Industrial Average












DJIA, +0.29%










  up 76 points to 26,860. The yield on the 10-year Treasury note












TMUBMUSD10Y, +1.18%










 rose slightly to close at 2.061%.



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