Federal Reserve chairman signals cut in U.S. interest rates

Andrew Cummings
July 10, 2019

The comments come amidst heightened tensions between Powell and the president, who's repeatedly lashed out at the US central bank for raising interest rates too frequently in 2018 - while also urging policymakers to cut rates at the upcoming July meeting.

He replied: "What I have said is the law gives me a four-year term and I fully intend to serve it".

On the subject of the Libra cryptocurrency, Powell was cautious in his statements, but open with the congresswoman.

Federal Reserve Chairman Jerome Powell once again said he would not resign if President Trump asked him to do so.

Indeed, CCN has it on good authority that Facebook was working on this project at least 12 months ago, having a meeting with the makers of Hedera HashGraph and ultimately integrating one of their ideas.

"I guess chairman Powell feels there is more downside risk to the economy and the Fed needs to accommodate that", said Kim Forrest, chief investment officer at Bokeh Capital Partners. That accusation followed his contention Friday that the central bank "doesn't have a clue" and is "our most hard problem".

The S&P 500 index and the Dow Jones Industrial Average each rose about 0.6% in the first half-hour of trading Wednesday.

The dollar gained on positioning ahead of Fed chair Powell's testimony tomorrow while we saw the pound fall to its weakest level against the greenback since April 2017 with cable falling to a low of 1.2440 in the last fifteen minutes. "But we don't have a Fed that knows what they're doing".

Earlier rounds of United States tariffs on trading partners including China had been dismissed as of little macroeconomic importance, with the Fed in early May still anticipating its policy rate would remain unchanged for the rest of the year.

Investors expect the Fed will cut its benchmark rate, now in a range between 2.25% and 2.5%, by a quarter percentage point at its 30-31 July meeting.

With investors in contracts linked to the Fed's targeted overnight lending rate putting the probability of a rate reduction at close to 100 percent, "it would be unprecedented for the Fed to not cut", Lavorgna wrote. Consumer spending and home sales look solid. And after a tepid job gain in May, U.S. employers sharply stepped up their hiring in June, an indication of the economy's durability.

The pound's woes are purely sentiment-based with Brexit uncertainty still weighing and economic concerns likely to see the United Kingdom economy contract in Q2.

Futures 0#FF: still price in a 25-basis-point cut at the Fed's July 30-31 meeting, but they no longer suggest a half-point move. President Donald Trump's trade wars have magnified uncertainties.

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