Fed rate cuts are not a certainty, regardless of market view: economists
The Federal Reserve gathered experts in Chicago this week to talk about the long-term strategy of monetary policy.
Some experts at the Chicago conference think the market is overstating the downside risks to the economy from the trade tensions. “Normally you get a recession either because inflation is too high and the Fed has to fight it, and that’s not there, or risks in financial markets that are undercapitalized and would cause panics, and I don’t think we’re there yet,” Gagnon said.
Dallas Fed President Rob Kaplan said in an interview with the Wall Street Journal that he wants to see if the escalation in trade tensions with Mexico will be prolonged before deciding whether the central bank should cut rates. Krishna Guha, vice chairman at Evercore ISI, said Fed Chairman Jerome Powell on Tuesday previewed the central bank’s likely message to the markets after its June meeting.
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