[ad_1]
Federal Reserve officials may not have their views on monetary policy, but on Thursday they were happy to interview on television to challenge President Donald Trump's view of the need for lower rates.
Both the Kansas City and Philadelphia Federal Reserve banks said in an interview with CNBC that they thought the July rate cut was unnecessary and that further cuts were unjustified. The bond market appeared momentarily to rebel, reversing the yield curve for the third time in eight days.
"I felt like we had added accommodation, but I thought it was not necessary," said Esther George, Kansas City Fed. "With this very low unemployment rate, with wages rising, with a rate of inflation remaining close to the Fed's target, I think we are well placed in relation to the mandates we are responsible for. to realise."
Just hours after the interview, Kansas City reported that mill activity in August had fallen back since 2016. The IHS Markit production index showed that the US manufacturing industry contracted for the first time. times in 10 years.
Patrick Harker of the Philly Fed also said that he did not think the July cut was appropriate and that the Fed should be suspended now.
"We are more or less neutral. It's hard to know exactly where the neutral is, but I think we're pretty much where the neutral is right now. And I think we should stay here for a while and see how things go, "said Harker.
Even as Harker made these comments, the 10-year Treasury rate fell below the 2-year rate, reversing the yield curve. This has often been a harbinger of an impending recession and is widely seen as an indicator that the Fed will need to ease its monetary policy. Shortly thereafter, however, the curve is not reversed.
Harker and George both spoke in Jackson Hole, Wyoming, where the Kansas City Fed is holding its annual research conference.
[ad_2]
Source link