No more rate hikes in 2019

Majority of Fed members see rates unchanged for rest of 2019

Members see rates to remain unchanged in 2019, Stockwinners

Minutes from the last Federal Reserve meeting read, “With regard to the outlook for monetary policy beyond this meeting, a majority of participants expected that the evolution of the economic outlook and risks to the outlook would likely warrant leaving the target range unchanged for the remainder of the year.

Several of these participants noted that the current target range for the federal funds rate was close to their estimates of its longer-run neutral level and foresaw economic growth continuing near its longer-run trend rate over the forecast period.

Participants continued to emphasize that their decisions about the appropriate target range for the federal funds rate at coming meetings would depend on their ongoing assessments of the economic outlook, as informed by a wide range of data, as well as on how the risks to the outlook evolved.

Short term rates should decline as 30-year rates rise, Stockwinners

Several participants noted that their views of the appropriate target range for the federal funds rate could shift in either direction based on incoming data and other developments.

Some participants indicated that if the economy evolved as they currently expected, with economic growth above its longer-run trend rate, they would likely judge it appropriate to raise the target range for the federal funds rate modestly later this year.”

Economic growth in 2019 likely lower than previous forecast

“Participants continued to view a sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee’s symmetric 2 percent objective as the most likely outcomes over the next few years.

Underlying economic fundamentals continued to support sustained expansion, and most participants indicated that they did not expect the recent weakness in spending to persist beyond the first quarter.

Nevertheless, participants generally expected the growth rate of real GDP this year to step down from the pace seen over 2018 to a rate at or modestly above their estimates of longer-run growth. Participants cited various factors as likely to contribute to the step-down, including slower foreign growth and waning effects of fiscal stimulus.

A number of participants judged that economic growth in the remaining quarters of 2019 and in the subsequent couple of years would likely be a little lower, on balance, than they had previously forecast. Reasons cited for these downward revisions included disappointing news on global growth and less of a boost from fiscal policy than had previously been anticipated.”


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Economy expanded at a moderate rate

Fed’s Beige Book says “economic activity continued to expand”



Fed’s Beige Book says economic activity continued to expand , Stockwinners


Fed’s Beige Book: “economic activity continued to expand in late January and February,” said the report.

But 10 Districts noted “slight-to-moderate” growth, with Philly and St Louis reporting flat conditions. That’s the most tepid characterization in sometime, as the more normal description has been “moderate” to “modest.”

About half of the Districts said the shutdown weighed on some sectors, including consumer spending was mixed, but in part due to “harsh winter weather and higher costs of credit.”

Manufacturing generally strengthened but “numerous” contacts worries about weaker global growth, higher costs due to tariffs, and continued trade policy uncertainty.

The service sector increased at a modest-to-moderate pace. Also, residential construction activity was steady or slightly higher in most of the U.S., but home sales were generally lower.

There was little change in the employment outlook, with employment increasing in most Districts, with “modest-to-moderate gains in a majority of Districts and steady to slightly higher employment in the rest.

Labor markets remained tight for all skill levels.

Wages continued to increase for both low- and high-skilled positions, and a majority of Districts reported increases were moderate.

And for prices, they continued to increase at a modest-to-moderate pace, “with several Districts noting faster growth for input prices than selling prices. The ability to pass on higher input costs to consumers varied by region and industry.”

The report (prepared by KC Fed with data collected on or before February 25) is consistent with the FOMC’s outlook for slower growth with tame inflation.

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