قالب وردپرس درنا توس
Home / Business / What Trump forgets about in his war with the Federal Reserve

What Trump forgets about in his war with the Federal Reserve



If President Donald Trump indirectly continues to push the Federal Reserve to cut interest rates by prolonging its disputed trade war with China, when it really hits the tab during the next recession, the monetary body could be paralyzed.

And it actually wouldn't be a good place for the Fed to be, as it looks for ways to jump start a sputtering US economy.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – -sm Mt (0.8em) – sm" type = "text" content = "" I don't think the answer is lower prices in any way. I also don't think we're going to push this all the way to potentially breaking the cycle. I think this is much more about [presidential] laying out and taking a hard line and getting ready for the 2020 election season, ”explained PNC Financial Services Chief Investment Strategist Amanda Agati at Yahoo Finance & nbsp; First Trade . "data-reactid =" 17 ">" I don't think the answer is lower prices by any means. I also don't think we're going to push this completely to potentially break the cycle. I think this is much more about [presidential] having an attitude and taking a hard stand and getting ready for the 2020 election season, ”explained PNC Financial Services Chief Investment Strategist Amanda Agati at Yahoo Finance & # 39; s First Trade.

Agati added, "My concern is really that if we continue to cut, and cut and cut interest rates and then get a reprieve on the trade front, then we may have wasted precious ammunition that we may not have available when the time really comes comes – when the cycle rolls over, and we really need to pull more levers. "

<p class =" canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm " type = "text" content = "To that point, [nbsp; counts September 18, 2019 as a day & nbsp; when the Fed potentially wasted a bullet in its recession era for recession. "data-reactid =" 19 "> Count to that point on September 18, 2019, as a day when the Fed potentially wasted a bullet in its recession arsenal.

<p class = "canvas atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "Bold & nbsp; cut interest rates again & nbsp; by 25 basis points to a new target range of 1.75% to 2% on Wednesday. It marks the Fed's second "policy rate cut" this year, and comes on the heels of US industry and labor market declines largely as a result of the effects of the US-China trade war. "Data-reactid =" 20 "> Fed cuts interest rates again by 25 basis points for a new target range from 1.75% to 2% on Wednesday, marking the Fed's second "policy rate reduction" this year, and coming in at the height of the slowdown in US industry and the job market largely due to the effects of the US

Recession risk increases

  During a press conference with reporters, Fed chief Jerome Powell promised that the FOMC would keep data dependent on future monetary policy actions, but largely took Mr. Market Powell's performance as a little more rude than planned </p><div><script async src=

Federal Reserve Chairman Jerome Powell speaks at a news conference following a two-day Federal Open Market Committee meeting on Wednesday, September 18, 2019 in Washington. (AP Photo / Patrick Semansky)

"Alongside the will to" act appropriately ", we see the bar for additional insurance in the form of interest rate reductions as relatively low," said Barclays strategist Michael Gapen in a note to clients.

With the glimpse of markets with more interest rate reductions likely this fall, Powell may be willing to waste extra recession in fighting bullets. And that the recession in the garden seems to be just getting closer, according to a growing number of pros on Wall Street.

<p class = "canvas atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8 em) – sm" type = "text" content = "Credit Suisse strategist Jonathan Golub sa recently, in client research, the recession risk increases, meanwhile, 38% of investors surveyed by Bank of America expect Merrill Lynch, a recession next year, versus 59% that sees a recession as unlikely. & nbsp; highest net recession since August 2009 . "data-reactid =" 45 "> Credit Suisse strategist Jonathan Golub recently said in client research that the risk of recession is increasing. Meanwhile, 38% of investors surveyed by Bank of America expect Merrill Lynch, a recession over the next year, compared to 59% who see a recession as unlikely. It is the highest net recession since August 2009.

At the Fed's current cut rate, interest rates could be zero by mid-2020. At that point, Trump may wish he hadn't complained about lower prices, the economy could barely grow and the Fed would have its hands tied . Try talking about it at a campaign event.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Brian Sozzi is editor and co anchor of The First Trade at Yahoo Finance Follow him on Twitter @BrianSozzi "data-reactid =" 47 "> Brian Sozzi is the editor and major anchor of The First Trade [19659013] at Yahoo Finance. Follow him on Twitter @BrianSozzi

Yahoo Finance & # 39; s live morning show.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " Read the latest financial and business news from Yahoo Finance "data-reactid =" 61 "> Read the latest financial and business news from Yahoo Finance

<p class =" canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" Follow Yahoo Finance at Twitter [19659040] Facebook Instagram Flipboard SmartNews [19659013] LinkedIn [19659012] YouTube and reddit [19659016] . "data -reactid =" 67 "> Follow Yahoo Finance on Twitter Facebook [19659013] Instagram Flipboard SmartNews [19659040] LinkedIn YouTube and reddit .

]
Source link