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The Fed Leaves Rate Increases on the Table
April 9, 2019
After the market turbulence late last year and increasing signs of a global economic slowdown, the Fed backed off their plans for further rate increases. Despite Fed Chairman Jerome Powell’s wait-and-see attitude regarding rate hikes, a few Fed officials acknowledge that further increases may still be coming.
Federal Reserve Bank of Cleveland President Loretta Mester said in a speech last week that the U.S. central bank might raise rates again. “If the economy performs along the lines I think is the most likely case—with growth picking back up to, or slightly above, trend, labor markets remaining strong, and inflation staying near 2%—the Fed-funds rate may need to move a bit higher than current levels,” she said.
Federal Reserve Bank of Philadelphia President Patrick Harker echoed the sentiment in a speech of his own last week, predicting “at most, one hike for 2019 and one for 2020.”
Worried about an economic slowdown some economists have noted that simply holding steady on rates may not be enough to stabilize the economy, and some have called for the Fed to preemptively cut rates to spur growth.
