Market Updates

Highlights from the Fed Meeting – June 18-19, 2019

Highlights from the Fed Meeting - June 18-19, 2019

FED ANNOUNCEMENT

• The Federal Open Market Committee continues to view strength in the current expansion highlighting low unemployment, picked up household spending, and moderately rising economic activity.

• However, soft readings on inflation and business fixed investment coupled with reemerging trade tensions and slowing global growth are prevailing uncertainties that the Fed is closely monitoring.

• The Fed voted to leave the fed funds rate unchanged at 2.25% - 2.50% in a 9-1 vote.

• Chairman J. Powell dropped ‘patient’ from his terminology stating that many FOMC members see a case for more ‘accommodative’ policy indicating that the Fed is ready and willing to act as appropriate to sustain the expansion.

• Fixed income markets took the announcement as a forewarning of darker times ahead, Treasury yields fell across the board on Wednesday as the two-year note dropped by more than 12 basis points to a yield of 1.74%.

• The market is pricing in a 100% chance of a rate cut at the July meeting and focus has shifted from whether cutting is necessary, to how much to cut by as some believe a 25 basis point cut is suitable while others are warranting a 50 point cut.

Please call us if you have any questions about Wednesday’s statement by Chairman Powell or want to discuss the potential direction of interest rates.

Read The Full Federal Reserve Press Release Here