Gibbs Wealth Management CIO and president Erin Gibbs discusses the importance of investing in U.S. stocks and First Trust Portfolios chief economist Brian Wesbury explains why the Federal Reserve did not need to cut rates in order for stocks to hit all-time highs.
Policymakers at the Federal Reserve largely agreed during their two-day meeting in October that another interest rate cut is not warranted, so long as the economy remains on its current path of growth.
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Minutes from the Oct. 29-30 Federal Open Market Committee published Wednesday revealed that the current rate range of 1.5 percent to 1.75 percent will likely “remain appropriate.”
Officials offered little guidance on what it would take for them to move rates again, after they voted to lower rates three times this year.
“Most participants judged that the stance of policy, after a 25 basis point reduction at this meeting, would be well calibrated to support the outlook of moderate growth, a strong labor market and inflation near the committee’s symmetric 2 percent objective,” the Fed said.
Still, officials maintained that monetary policy is not on a preset course, noting that members will take into account changes in economic data and the general outlook.
In July, the central bank first cut rates, ending an era of monetary policy tightening by policymakers, who had voted nine times – as recently as December – since 2015 to hike rates. Powell has repeatedly positioned the cuts as a “mid-cycle adjustment” intended to insulate the economy against the U.S.-China trade dispute and a global growth slowdown.
The Fed has one more policy-setting meeting before the end of the year, slated to take place on Dec.10-11. Traders largely expect the U.S. central bank to keep rates unchanged until at least mid-2020.
This is a developing story. Please check back for updates.
