All Posts Tagged: fed funds rate

U.S. Outlook: The curious case for panicked rate cuts

Scott Anderson
Chief Economist

Wait a minute. What’s the argument for cutting the Fed funds rate either 75 or 100 basis points before the end of the year, again? I have the feeling that markets blew right past that question on Wednesday, and simply equated the Federal Reserve leaning toward cutting interest rates with a massive amount of monetary stimulus. That is all it took and stocks and bonds were off to the races with no interest in looking back.

Federal Reserve building at dusk

Unless the Fed thinks the economy will be in recession in the next three to six months, and I don’t think a majority of FOMC members believe that today given their recent GDP and unemployment rate forecasts, the Fed might want to reserve some bullets for when they are staring a recession right in the face.

For more on this, see highlights of my report below, followed by a link to the full U.S. Outlook, delivered on June 21.

Key observations:

• The argument for aggressive Fed rate cuts this year are pretty thin, based on employment and housing data.
• Aggressive rate cuts now could trigger an asset price bubble down the road.
• The Fed should save some of its rate cuts for when a recession is an imminent threat.

Read my full report.

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U.S. Outlook: A warning from the jobs report

Scott Anderson
Chief Economist

Hiring faded across the board in May. This is not just a one-off hiccup in the data, but part of a broader more prolonged pattern of labor market softening.

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Instant Analysis: FOMC delivers on rate hike; statement and dot plot turn hawkish

Scott Anderson
Chief Economist
Federal Reserve building (Washington DC) at dusk.

For now the Fed is throwing caution to the wind and is pressing ahead with steady rate hikes this year, despite growing downside risks from trade. 

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Instant Analysis: FOMC holds interest rates steady in May, signals June increase

Scott Anderson
Chief Economist
View of a eagle statue on Federal Reserve building in DC

The Federal Reserve held the fed funds target rate steady at the May FOMC meeting, as was widely expected.

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U.S. Outlook: No sign of an April bounce so far

Scott Anderson
Chief Economist
Graph showing recent drop in Philly Fed Business Outlook Survey.

Preliminary signs are that weaker-than-expected data visible in March may be carrying over into April.

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