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Votes The FOMC member suggests she will not support an interest rate cut at the next meeting



Kansas City Federal Reserve President Esther George hinted in a speech Sunday she may not support a new Federal Fund Rate Rate cut at the next meeting. George is a voting member of the Federal Open Market Committee this year.

FOMC meets for two days October 29 and October 30. After the end of the meeting, the committee will decide whether to cut the Federal Funds Rate. This rate directly affects the interest rate on mortgages and credit cards as well as other interest rates.

Kansas City Federal Reserve President says the economy is in a "good place" reflecting the words of Federal Reserve Chairman Jay Powell as of Friday. [1

9659003] However, George says that inflation that runs just below the target is no reason to cut interest rates again, saying: "In the middle of the longest cyclical expansion in history, inflation which runs a few tenths of a percent below 2 percent in itself not a compelling reason to offer extra monetary accommodation. "She adds that people on" Main Street "don't see inflation running below the Federal Reserve's 2 percent target for a long time as a problem.

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Another voting member of FOMC, St Louis Federal Reserve President James Bullard, thinks the Federal Reserve needs to get inflation back to the target of 2 per cent. E 25 basis point interest rate cut, and advocates for a more drastic 50 basis point interest rate cut at the last meeting. US industry may be in a recession due to trade uncertainty.

George points to uncertainty as a potential cause of low inflation, saying in the National Association for Business Economics annual meeting that trade uncertainty and the global economic downturn could lead to to companies in the US being more cautious and artificial, keeping inflation at home and around the world low.

“Rather than focusing too narrowly on to achieve a precise 2 per cent inflation target, I think it is more realistic to accept that there will be both temporary and sustained fluctuations around this long-term target. ”Says George. Adds inflationary fluctuations, "… should be tolerated, depending on broader economic conditions."

She leaves the door open to an interest rate cut if the economic data shows weakness, "If weaker global demand and trade policy uncertainty would substantially weaken my modal outlook for growth, and providing additional monetary accommodation might be justified."

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Weakness could not be seen in the latest Bureau of Labor Statistics Labor Report which shows that unemployment falls to a low of 3.5 percent. It is a brand that has not been seen since December 1969.


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