Are Interest Rate Cuts in Our Future?

Are Interest Rate Cuts in Our Future?

It has been apparent that President Trump wants the Federal Reserve to cut interest rates.  His belief is that had the Fed left rates lower, the US and global economies would be stronger.  His proposal includes lowering the interest rates from about 2.5 percent to 2 percent.  Although it has been historically practiced that the Fed is to be independent of politics for credibility purposes, President Trump is relying on a strong economy for possible reelection.

Though there are some mixed reviews stemming from the central bank, the overall message is being heard.  Wall Street has started to price in a rate cut for later this year and with economists’ assessment that the economy is slowing, there is more reason to believe that a rate cut is upon us.  If rates do indeed get cut, will we see it done once or twice?  That is all still up in the air.

Wall Street did not raise rates at its last meeting on March 21, 2019 and the stocks that Friday closed out with the best quarter in years.

 

Reference: Long, Heather (2019, March 29). Trump wants the Federal Reserve to cut interest rates now. Wall Street is starting to agree. Retrieved from https://www.washingtonpost.com/business/2019/03/29/trump-wants-federal-reserve-cut-interest-rates-now-wall-street-is-starting-agree/?utm_term=.167f02503bae.

 

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