Federal Reserve Bank leaders, working to prevent an economic slowdown, begin two days of meetings on Tuesday. Economists predict they will announce an interest rate cut of 25 basis points, or a quarter of a percent. It would be the second cut this year. I joined CBS This Morning to discuss how this could affect your bottom line.
For the first time in a decade, the Federal Reserve is likely to cut interest rates. Citing the “crosscurrents” of slowing global growth, uncertainty over trade policy, and static prices, the central bank will preemptively shave 0.25 percent from the fed funds rate, putting the new range at 2-2.25 percent.
Dow 27K! S&P 500 3K! NASDAQ 8200! Just months after the bull market in stocks and the current expansion each became the longest on record, U.S. equity indexes reached more milestones last week. Sure, the economy is expanding, but you can thank one person for the recent leg up in the bull market rally: Fed Chairman Jerome Powell.
Amid renewed Presidential criticism and evidence of a slowing economy, Fed officials will convene a two-day policy meeting this week and the pressure is on. As always, central bankers have to balance maintaining a strong enough economy to foster job growth, but it can’t run too hot, which might trigger inflation. Right now, there’s a battle brewing inside the collective Fed’s Head between action and inaction.
The government reported that the economy added a better than expected 263,000 jobs in April. It was the 103rd straight month of job growth, the longest streak on record. Nearly ten years into the expansion, job creation is 205,000 for the first four months of 2019, just above the monthly amount added since the labor market bottomed out in 2010.
Three different producers contacted me about the following headline, which appeared last week in the Wall Street Journal: “Inverted Yield Curve Is Telling Investors What They Already Know.” You may be forgiven for that case of déjà vu, because we last discussed the inverted yield curve in December. Here’s a refresher from my post on the topic:
Last week, the Federal Reserve decided not to raise interest rates. The more dovish Fed outlook pushed down interest rates, which led mortgage rates to 14-month lows. The current 30-year fixed rate loan stands at just under 4.3 percent, just in time for the spring home buying season. I joined CBS This Morning to discuss.
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