Fed: Softer conditions and muted inflation warranted patient approach to further rate increases
|"Softer conditions late in the year and muted inflation warranted a patient approach to further rate increases," the Federal Reserve explained on Friday in its semi-annual monetary policy report to Congress.
Key quotes (via Reuters)
- Economy appears to have maintained a 'solid pace' of growth in second half 2018; estimates 'just under' 3 pct growth for year.
- Partial government shutdown likely held down GDP growth in first quarter 2019 'somewhat,' largely due to lost work of federal workers and contractors.
- Timing and size of future adjustments to the fed funds rate will depend on incoming data.
- Consumer spending, business investment appear to have weakened near the end of last year.
- Hourly compensation has 'stepped up' since June 2018 but growth rates remain moderate by historical standards.
- Consumers' perceptions of homebuying conditions deteriorated sharply over 2018 amid higher mortgage rates and still-rising house prices.
- Financial conditions have become less supportive of economic growth.
- Financial system remains 'substantially more resilient' than before financial crisis but notes 'high' debt of businesses and some deterioration of credit standards in second half 2018.
- Potential downside risks to international financial stability include 'political and policy uncertainty' and 'intensification of trade tensions'.
- Longer-run size of Fed balance sheet will be 'considerably larger' than before financial crisis.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.