Fed cuts rates for 3rd time in 2019

The Federal Open Market Committee (FOMC), as expected, cut interest rates by 25 basis points Wednesday at the conclusion of its two-day monetary-policy setting meeting. The federal funds target rate is now set at a range of 1.5 to 1.75 percent.

“The Fed’s decision to cut rates has little to do with the real economy, and will be pitched as a nod to rising risks associated with the trade war and slowing growth abroad,” said NAFCU Chief Economist and Vice President of Research Curt Long. “The risk of unsettling financial markets, which had already priced in a rate cut, was also a factor.

“Markets are doubting a rate cut in December, and in dropping the language associated to supporting the expansion, the FOMC is clearly signaling a more hawkish turn,” Long added. “The hurdle for another rate move will be significantly higher as the Fed assesses the impact of its easing campaign, with the hopes that it can maintain what little ammunition they have in case of a deterioration in the real economy.”


continue reading »