All Posts Tagged: Jerome Powell

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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Investment Insights: You can fight the Fed

Wade Balliet
Posted by Wade Balliet
Investment Strategy

Financial markets are breathing a momentary sigh of relief after one of the biggest negative months in recent memory for stocks.

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Instant Analysis: Fed Chair Powell open to reducing rates

Scott Anderson
Chief Economist

Federal Reserve Chairman Jerome Powell says that the Fed is closely monitoring rising global trade disputes and the potential fallout on the U.S. economy.

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Investment Insights: Waiting for a catalyst

Wade Balliet
Posted by Wade Balliet
Investment Strategy

After hitting a rough patch in the last few months of 2018, the S&P 500 rebounded to gain over 10% in just the first two months of the year, which is already higher than the full calendar year returns in three of the last five years. If stocks continue at this pace for the rest of the year, the S&P would return over 100% in 2019! Unfortunately, we don’t see that as a likely scenario.

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U.S. Outlook: Dissecting the dots

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

Just looking at the Fed’s median forecast gives one a false sense of precision about the future of U.S. interest rates.

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