Federal Reserve Board Chair Jerome Powell and other Fed officials recently asserted there was “no need to change to rates any time soon.” The minutes of the recent Federal Open Market Committee meeting on November 18 offered some details. Two Fed presidents — albeit hawks — stated their position that rates should remain at the current 1 . 50% to 1 . 75% range.
Federal Reserve Bank of Boston President Eric Rosengren, who dissented on the three recent rate cuts, reiterated his concern about low rates in a Bloomberg interview and ruled out negative rates, even if a recession occurs.
Federal Reserve Bank of Cleveland President Loretta Mester said in a talk the panel can take a wait-and-see approach before deciding its next move.
In testimony before Congress, Powell stated “the current stance of policy is likely to remain appropriate as long as the data supports,” he said. “Powell also indicated that a push to raise rates would likely require ‘serious’ inflation,” which is not expected.
The Bondbuyer.com asked Zach Abraham, in addition to other leading financial experts, what he thought of the Federal Reserve’s recent remarks.
“The Fed is watching the markets,” noted Zach Abraham, Principal/Chief Investment Officer at Bulwark Capital Management. “91% of household wealth is in financial assets and 8% is in real assets. When you consider the fact that the wealthiest and largest generation in our nation’s history is retiring en masse and now relying on said financial assets to replace income, the market is the economy,” he said.
While market pullback late last year was attributed “to decreased consumer spending in the fourth quarter, in reality, consumer spending dipped 8% BECAUSE the market dropped 20% in 2 months.”
Read the entire article here: https://www.bondbuyer.com/news/fomc-where-it-needs-to-be-for-a-treacherous-political-year
ABOUT THE PUBLICATION
The bondbuyer.com is designed for municipal finance professionals, bond issuers, government officials, investors and other decision makers in the municipal bond industry; the website receives nearly 59,000 unique visitors per month. It provides breaking news, analysis and data regarding all areas of municipal finance. The site features news on the national as well as regional levels, and it contains market statistics, graphs, charts, photos and weekly indices.