WASHINGTON - It takes a lot to kill an economic expansion, typically requiring a major shock to bring growth to a halt and trigger a US recession. This week investors signaled that moment may have arrived, and one big question is whether that shock has come from President Donald Trump's trade war or a mistake by policymakers at the US Federal Reserve. As bond markets flashed concern about recession on Wednesday and major stock indices cratered, Trump put the blame squarely on the Fed for continuing to raise rates through the end of last year. Even Trump foe and New York Times economics columnist Paul Krugman dinged the Fed for "a clear mistake." In raising interest rates four times last year "the Federal Reserve acted far too quickly, and now is very, very late," in reversing itself and cutting borrowing costs only modestly so far, Trump tweeted. "Too bad, so much to gain on the upside!" Earlier on Wednesday, White House trade adviser Peter Navarro told Fox Business Network the US … [Read more...] about Markets register a shock, but is Trump right to blame the Fed?
Current fed funds rate
SAN FRANCISCO: U.S. central bankers are expected to lower borrowing costs this week for the first time since the depths of the financial crisis more than a decade ago. That's the easy part.Whether that inaugurates a series of quarter-percentage-point interest rate cuts that could stretch deep into next year, as financial markets are betting, or something more limited is by far the harder decision facing Federal Reserve policymakers.One reason: No clear consensus from Fed officials about why they need to cut rates in the first place, particularly with the U.S. unemployment rate near a 50-year low and the American economy puttering along as the best-in-class performer among developed nations.Is it a bit of insurance against risks posed by slowing global growth and trade tensions? A step to bolster sluggish inflation? A bid to lift labor markets further? An effort to right kinks in the bond market? Over the last several weeks, Fed policymakers have floated each of these ideas and … [Read more...] about A Fed interest rate cut is in the bag. What then?
LONDON: European shares followed Asian stocks higher on Monday after the United States shelved plans to impose tariffs on Mexico and as investors anticipated lower U.S. interest rates when the Federal Reserve meets next week on the back of poor jobs data.Investors had fretted that opening up another trade conflict, while still battling with China, could push the United States and other major economies into recession. The Mexican peso rallied as much as more than 2per cent on Monday.But in China, the yuan slipped to its weakest this year after the country's imports fell the most in nearly three years and as talks to end the Sino-U.S. dispute remained deadlocked.The pan-European STOXX 600 gained 0.1per cent in early trade, with Britain's FTSE 100 up 0.5per cent, while S&P500 mini futures were up 0.4per cent after rising as much as 0.8per cent.Liquidity was lower than usual with markets in Germany, Switzerland, Sweden, Norway, Denmark and Iceland shut for national holidays.The 10-year … [Read more...] about Stocks climb on trade, rate cut optimism; yuan falters
WASHINGTON (REUTERS) - The Federal Reserve held interest rates steady on Wednesday (May 1) as policymakers took heart in continued US job gains and economic growth and held out hope that weak inflation will edge higher. "The labour market remains strong... economic activity rose at a solid rate" in recent weeks, the US central bank said in a policy statement a day after President Donald Trump called on the Fed to cut rates by a full percentage point and take other steps to stimulate the economy. Fed policymakers said the economy was in good shape as it stands, with ongoing job and economic growth, and an eventual rise in inflation, still "the most likely outcomes" as the US expansion nears its 10-year mark. At its two-day meeting, the Fed also trimmed the amount of interest it pays banks on excess reserves to 2.35 per cent from 2.4 per cent in an effort to ensure its key overnight lending rate, the federal funds rate, remains within the current target band. The chief concern flagged in … [Read more...] about Fed keeps interest rates steady as US economy motors along
Business The U.S. Federal Reserve, leaning back against pressure from President Donald Trump to slash interest rates, is expected to leave borrowing costs unchanged on Wednesday as it maintains a 'patient' monetary policy stance amid strong economic growth. 01 May 2019 01:10PM (Updated: 01 May 2019 01:11PM) Bookmark WASHINGTON: The U.S. Federal Reserve, leaning back against pressure from President Donald Trump to slash interest rates, is expected to leave borrowing costs unchanged on Wednesday as it maintains a 'patient' monetary policy stance amid strong economic growth.Trump, who has accused the U.S. central bank of undercutting his efforts to boost economic growth, said on Twitter on Tuesday the Fed should cut its key overnight lending rate by a full percentage point and renew the quantitative easing program that saw it pump trillions of dollars into the economy in response to the 2007-2009 financial crisis and recession.Fed officials were in the middle of their latest … [Read more...] about Fed likely to ignore Trump’s call to cut interest rates