FIRST AIRED: June 19, 2019

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00:00:00
in the most highly anticipated meeting since Jerome Powell took over the federal reserve in two thousand eighteen the world's most powerful central bank Wednesday indicated for the first time in two years this stands ready to cut interest rates if the economy weakens further but for now it's holding rates steady at two and a quarter to two and a half percent the fed said solid consumer spending was being offset by weaker business spending and stubbornly low inflation leading Powell and his colleagues to drop a pledge to remain patient and hit the fed's next move is likely to be down not up thus while the baseline outlook remains favorable many FOMC participants cited the investment picture and weaker business sentiment , in the cross currents I mentioned earlier as supporting their judgment that the risk of less favorable outcomes has risen the fed has been facing intense pressure from president trump and financial markets to lower rates as the trade war with China slows down the economy rotors fed watcher Trevor honey cut well what the fed told us is is that they're not ready to say to say anything about the timing of a rate cut just that they're prepared to think about it and then what we know is that they had a discussion about it one of the members of the FOMC one of the voting members of the FOMC Jim Bullard actually dissented from the decision to keep rates steady he wanted a cut now but what Powell indicated in his press conference afterwards is that %HESITATION most of the people on the committee do not feel that way they don't think a cut is is imminent but what they said is that they're open to doing it and that could come as soon as the next meeting but investors are now predicting a ninety nine percent chance the fed will cut rates in July still there are several events before that meeting which could determine if the fed delivers at the end of June trade talks resume between trump and Chinese president xi Jinping that's followed by the latest employment report released on July fifth and then corporate earnings season kicks off in earnest the week of July fifteenth on July twenty sixth the first look at second quarter economic growth is released the fed will have all that information to consider when it meets again at the end of July even if a cut comes in July the fed might not be done some members of the fed predicted to a quarter point rate cuts before the year is over