Powell's speech supports US rate cut bets


Federal Reserve Minister Jerome Powell said the central bank will do what it can to preserve the longest recorded economic expansion, supporting commitments on further reductions in key borrowing costs.

PHOTO FILE: Screen shows the numbers after the final clock as traders operate on the floor at the New York Stock Exchange (NYSE) in New York, U., August 14, 2019. REUTERS / Eduardo Munoz

Powell said, in a talk she was expecting at an economic symposium in Jackson Hole, Wyoming, that the Fed “events that might be going beyond her observation, focus on how trade developments are going in. force the attitude, and adjust policy to promote our objectives ”of 2% inflation and strong employment.

“Powell's speech didn't mention Jackson Hole's mid-cycle adjustment and investors could take that as a hint that it is more likely to be closer to a mitigation cycle than a few rate cuts to see,” Edward Moya, senior market analyst at OANDA in New York, said.

Last month, the FED reduced the main borrowing costs for the first time since 2008, and cited a growing global economy and weak domestic inflation.

Worldwide manufacturing activity, which was exacerbated by the US trade crop, highlighted commitments that US policy makers would choose to encourage more to expand domestic economic expansion, the analysts said t .

There have been some doubts about the timing and number of rate reductions this week.

On Thursday, President Fed Kansas City Esther George and President of Philadelphia Fed Patrick Harker said the Fed must not stimulate more economically now, after a first rate cut in more than a decade in July.

Their peace of mind failed to shake the conviction of traders that lower rates were needed again at their September meeting.

Traders now see a further fourth as the next most likely dietary movement, according to the CME Group FedWatch tool. They are no longer seen as an aggressive half-point cut, even as President St Louis Fed, James Bulllard, said on Friday, there would be a "strong debate" on such work next month.

Fusion funds contracts see implied traders that there is a 95.0% chance of reducing the fourth point rate at the Fed's policy meeting on September 17-18, up from 90% Wednesday and 77.7% a week ago. FedWatch showed CME.

“Powell's talk is a huge ambition in a 25-tier cut-off period in September,” said Moya.

Powell's latest speech did not revive much, the FED is ready to engage in a half-point aggressive rate reduction at its policy meeting in September, analysts said.

Implicit traders of nutritional funds see about 5% of half-point rate cut in September, compared to late Thursday's zero.

(Graphic: next rate charged to the rate of growth? Link: here)

Reporting by Richard Leong; Edited by Bernadette Baum and Richard Chang

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