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Powell says the Fed is 'grappling' with whether to cut interest rates
Wednesday, 26 June 2019 00:28 WIB | MONETARY |The Fed

Federal Reserve Chairman Jerome Powell on Tuesday suggested an interest-rate cut in July, widely expected by investors and economists, is not a done deal.

While greater uncertainty about trade and worries about global economy might be starting to show through to economic data, officials don™t know how long this may last and how serious the drag might be, the Fed chairman said.

œThe question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation, Powell said, in brief remarks ahead of a moderated discussion at the Council on Foreign Relations in New York.

Powell said that œmany FOMC participants judge that the case for somewhat more accommodative policy has strengthened.

Only 10 of the 17 Fed participants are voters. The committee voted 9-1 to hold rates steady last week.

Since the Fed meeting last week, three Fed officials have publicly made the case for interest rate cuts and one took a wait-and-see approach similar to Powell™s.

Powell said Fed officials are mindful that monetary policy œshould not overreact to any individual data point or short-term swing in sentiment.

Powell said the basic economic outlook of the FOMC œremains favorable. Officials expect inflation to return to 2% over time œbut at a somewhat slower pace than we foresaw earlier in the year, he said. The downside risks to this outlook appear to have grown, he said.

Source : MarketWatch

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