Although the Labor Department’s last report indicated an easing of inflation to 5.4% and a research group said on Thursday that September inflation pressures fell to a more than six-year low, a Fed president thinks lowering interest rates is not the answer right now.
“I think lowering interest rates right now, maybe, is not the right response,” James Bullard, president of the Federal Reserve Bank of St. Louis, told an audience in Bloomington, Indiana after giving a speech on Thursday.
The Federal Reserve is naturally inclined to raise interest rates to combat inflation, and lower them to reduce the pull of downward economic activity or recession.
Continue reading Inflation eases, but Fed’s Bullard concerned with cutting interest rates
With the latest financial sector turmoil and easing inflation, many economists were at least thinking the Federal Reserve would reduce interest rates on Tuesday. That was not the case. The Fed left the benchmark federal funds rate stead at 2 %, where it’s been since April and for the third straight meeting.
The vote was unanimous, without even a dissent from Dallas Fed President Richard Fisher, who voted to increase rates during two prior Fed meetings.
A MarketWatch article by Greg Robb aptly opened with the the likely intent on the move:
"[The fed is] trying to project an appearance of calm and stability amid the turmoil of financial markets."
The Federal Open Market Committee (FOMC) statement reflects continual concern over economic growth and the direction of inflation despite the latter showing a slight easing according to a report today by the a Labor Department.
Continue reading Fed leaves rates steady at 2% despite financial turmoil and easing inflation
The Federal Reserve met Tuesday and did what most expected… nothing. Concern over both inflation and economic growth were voiced. But in the end, the Fed left the benchmark federal funds rate at 2 %, where it’s been since April.
The vote was 10-1, with a dissent from Dallas Fed President Richard Fisher, who wanted to increase rates to combat inflation, as he did in the last Fed meeting.
Based on the Federal Open Market Committee (FOMC) statement after the meeting, investors took measure and concluded the Fed would not raise rates in the near term either. Continue reading Fed warns against inflation, but hold rates at 2%