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Strong job growth spark debate on next Fed move
Karen Kerrigan of the Small Business and Entrepreneurship Council, Paul Dietrich, CEO of Fairfax Global Markets, and Jeff Korzenik, Chief Strategist of the Fifth Third Bank, wonder if the Federal Reserve will cut rates in 2019.
President Trump returned to the US Federal Reserve on Friday night, calling the US central bank the "most difficult problem" for the country.
"They raised rates too early, too often and tightened, while others did exactly the opposite," Trump wrote in a tweet. "As well as we do from the day after the big election, when the market exploded, it could have been even better: a huge extra wealth would have been created and used very well. Our most difficult problem is not our competitors, it's the Federal Reserve! "
The President has repeatedly called on the US central bank to lower the federal policy rate – although Fed policymakers have decided to raise interest rates four times in 2018, now in a range of 2.25%. and 2.50%, rates remain historically low.
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Trump has not hesitated to criticize both the Fed and its president, Jerome Powell, whom he has handpicked over a year ago. In early June, Trump doubled his attacks, blaming him for raising rates too quickly and adding "ridiculous quantitative tightening."
More recently, at its June meeting, the Fed raised the possibility of a rate cut in July, but said it ultimately depended on the uncertainties surrounding the US-China trade war, than the persistence of moderate inflation.
June jobs report better than expected – analysts expected the US economy to add 160,000 jobs; instead, it created 2240,000 – seemingly putting a brake on the hopes of an immediate rate cut (although traders continue to expect 100% of the chances of policymakers to vote to ease monetary policy when they July meeting).
"A 25 basis point reduction in insurance is still on the table in July, but beyond that, NAFCU sees no reason to expect further easing this year," Curt Long said. , chief economist of the National Association of Credit and Savings Cooperatives insured by the federal government.
Powell is scheduled to testify at Capitol Hill before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday, during which he is expected to shed light on the Fed's interest rate policy.
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