In an effort to boost our rather sluggish economy, the Fed announced today that they will cut interest rates by .25%. This marks the third rate cut of 2019. As the trade war with China wages on, threatening our economy, this latest rate cut is seen as a way to combat it. However, while they did cut rates, Fed Chairman Powell said going forward the Fed will be in a “wait and see” mode, signaling a dovish outlook.
Furthermore, Fed leaders insist they don’t see a recession in the future, which seems to be the popular talk of the towns these days. Fed Chairman Powell went on to say, “Weakness in global growth and trade developments have weighed on the economy and posed ongoing risks” to which he added “We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook…Policy is not on a pre-set course”.
What this statement means remains to be seen, but it sounds rather dovish. It appears the Fed has no plans to cut rates again this year, much to the chagrin of President Trump. Again, this is purely speculation on what Powell said, we could still see changes in the future.
For more information on how interest rates effect the economy, check out our free Interest Rates and The Economy Guide.