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Federal Reserve Chairman Jerome Powell said the case has strengthened for interest rate cuts ahead.
Speaking to media members after this week’s central bank meeting, Powell said policymakers are concerned about some of the recent economic developments and see a growing case for easier policy.
“Overall, our policy discussion focused on the appropriate response to the uncertain environment,” he said. “Many participants believe that some cut to the fed funds rate would be appropriate in the scenario they see as most likely.”
Among those concerns are slowing global growth, inflation that persistently falls short of the Fed’s 2% target and the ramifications of tariffs the U.S. and its trading partners, particularly China, have leveled.
The comments came following a meeting in which the Federal Open Market Committee opted to keep its benchmark interest rate unchanged but signaled possible cuts ahead amid a weakening economic environment.
“Many participants now see the case for somewhat more accommodative policy has strengthened,” Powell said.
The decision to hold the line was 9-1, but a dot plot chart that shows individual members’ expectations for rates showed division about where rates go through the remainder of 2019.
The median “dot” indicated no change in rates this year, but the full chart showed eight members in favor of staying put, eight expecting to cut and one projecting a quarter-point increase.
Powell said even those members who favored the status quo “agree the conditions for accommodation have strengthened since our May meeting.”
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