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The President of the Kansas City Federal Reserve Bank, Esther George, said she still wanted more data before the next meeting of the Central Bank Board, to be held on September 18, with a special attention to the consequences of the ongoing trade war.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" There have always been worries, uncertainty around trade, "George told Yahoo Finance on the sidelines of the project organized by the Kansas City Fed & nbsp;Jackson Hole Conference. "That takes that into account. I think it's too early to judge how the real economy will be affected. "" Data-reactid = "16"> "There are still worries, uncertainty around the trade," George told Yahoo Finance on the sidelines of Kansas. Jackson Hole conference organized by the City Fed.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "George, voting member of the Federal Open this year Market Committee, & nbsp;dissident& nbsp; against the Fed's decision of July 31 & nbsp;decision to reduce interest rates by 25 basis points. In her dissent, she said the incoming data should "indicate a weakening of the economy" before it can sustain interest rate cuts. "Data-reactid =" 17 "> George, a voting member of this year's Federal Open Market Committee, has declared himself dissenting against the president.The Fed's decision to cut interest rates by 25 basis points July 31 said in its statement that the incoming data should "indicate a weakening of the economy" before it can support interest rate cuts.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "[See Also: Fed’s George: Rate cuts ‘not likely to resolve’ trade uncertainty]"data-reactid =" 18 ">[See Also: Fed’s George: Rate cuts ‘not likely to resolve’ trade uncertainty]
George told Yahoo Finance that the data received since the last Fed meeting was "mixed". In contrast to the weakness of fixed business investment, George pointed out that the number of retail sales exceeded estimates for the month of July.
"I will look at the data until the meeting starts," George said.
<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A data point that has attracted a lot" attention Since the last Fed meeting: the inverse yield curve: on August 14, the 10-year US Treasury yield has fallen below the 2-year US Treasury yield & nbsp;for the first time since 2007just before the financial crisis. This type of "yield curve reversal" has a strong history of forecasting slowdowns; an inversion preceded the last seven of the seven recessions dating back to 1969. "data-reactid =" 21 "> A data point that has attracted a lot of attention since the last Fed meeting: the inverse yield curve. On August 14th, the 10-year US Treasury yield fell below the 2-year US Treasury yield for the first time since 2007, just before the financial crisis.This type of "yield curve reversal" predicts declines, inversion preceded the last seven of the seven recessions dating back to 1969.
Kansas City Fed President Esther George speaks from Jackson Hole.
George said policymakers must react cautiously to the yield curve, which broadly measures investor sentiment about the US economic future. Although she acknowledged that inversions are a decent predictor of the recession, she felt that the pressures on US yields could be the result. international pressure.
"At the moment, although I'm always careful to say" this time, it's different, "I think there are certain factors when you look at the rest of the world and the weaknesses some of these economies, "said George. "This could explain why long-term rates are so low."
<h2 class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Powell's communication scoring"data-reactid =" 35 ">Powell's communication scoring
Although George did not suggest whether she would support the cuts at the next Fed meeting, she also expressed her concern over the efforts of Fed President Jerome Powell to communicate his policy to the Fed. public.
"Certainly, as political choices become more difficult, there are problems with how to communicate that," said George. "I think he did well to try to tell how the committee reaches its decisions."
In the past 10 months, the Fed has moved from a "graduated" interest rate hike to a "patient" procedure, to a reduction in "insurance" on July 31st. The speed at which the Fed has changed its tone has had the effect in maximum alert, while the observers of the Fed are trying to understand what the central bank will do next.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Some have warned that the Fed risked & nbsp;"trigger[ing] "Carnage" by potentially confusing markets. "data-reactid =" 39 "> Some have warned that the Fed may be" triggered "[ing] "carnage" by potentially confusing markets.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "A difficulty concerning the communication of the Fed among the last few minutes after the July 31 decision to cut rates by 25 basis points, the Fed's decision to cut rates by 25 basis points showed a huge gap, with two Federal Open Market Committee members arguing for cuts 50 basis points, but "many" members (including & nbsp;George and Boston Fed President Eric Rosengren) lobbied for rates to not change at all. "data-reactid =" 40 "> One of the problems with the Fed's communication in recent weeks has been to strike a balance between the now broad spectrum of policy recommendations among Fed officials, just minutes from the Fed. The decision of July 31 to cut rates by 25 basis points caused a huge imbalance, with two members of the Federal Open Market Committee advocating cuts of 50 basis points, but "several" members (including George and the president of Boston Fed Eric Rosengren) insisted that nothing change on rates at all.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Powell was instructed to explain the decision to the Fed to leave with the middle ground: a 25 basis points reduction in insurance, but markets & nbsp;went for a walk at his press conference& nbsp; announce the decision; Powell described the move as a "mid-cycle adjustment" before stating, "I did not say it was an accident." [cut] "data-reactid =" 41 "> Powell was asked to explain the Fed's decision to choose a middle ground: a reduction of" insurance "by 25 basis points. went ahead during his press conference which announced Powell described the move as a "mid-cycle adjustment" before stating: "I did not say that it was just one [cut] or something like that. "
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