Rate Cut Expected as POTUS Pressures Fed
President Trump continues to criticize the Federal Reserve sharply for past interest rate hikes. He is demanding rate cuts in 2019. Stock market investors, rattled by threats to impose tariffs on Mexican goods, want rate cuts to bolster the equity market. Most (95 percent) Wall Street observers anticipate that the Fed will announce a quarter-point cut following its June or July meetings, according to BMO Capital Markets.
The Fed’s strategy conference last week in Chicago began to prepare the public for a round of quantitative easing in an effort to short-circuit opposition to the measure. Citing lessons learned following the 2008 crash, Fed Chairman Jerome Powell said the Fed must take measures now and purchase assets to counteract risks of a recession. Trump’s trade wars put the Fed in a tough spot as it tries to support high employment and low inflation (nytimes.com).
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