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Jerome Powell confirms rate cut this month

Federal Reserve Chairman Jerome Powell told Congress earlier this week that since its last policy meeting “trade tensions and concerns about global growth” continue to weigh on the economy, while weak inflation will be “more persistent” than the Fed anticipates. 

  • Why it matters: Wall Street was looking to Powell for confirmation of its expectation that there will be a cut of at least a 25 basis point rate later this month. Powell provided exactly that, according to the NYTimes.
  • Intrigue from the minutes: Several FOMC members “didn’t see a strong rate-cut case” and a few saw a rate cut as a risk that could create “financial imbalances” in the economy.
  • Wall Street reacts: Bank of America-Merrill Lynch research analysts say they’re now anticipating 3 more rate cuts this year, 1 at each of the Fed’s next 3 meetings. But they’re also expecting some pushback from members who have been on board with the pivot to “patience,” but may not be as amenable to cuts.
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