Trump has been leaning on Fed Chair Powell to make the cut…
While American and foreign economises are slowing….
Trump wants lower interest rates to keep the economy going….
Fed Chairman Jerome Powell, in prepared remarks for Congress, reaffirmed that the Federal Reserve is concerned about economic weakness and that it will act as “appropriate” to sustain the recovery — a signal to markets that a rate cut is coming soon.
Powell said overall growth seems to have moderated in the second quarter, and in recent weeks the outlook has not improved. “Crosscurrents have reemerged,” he said in his testimony, noting that investments slowed down “notably” from trade tensions and a global slowdown.
“Bottom line, Jay Powell fully endorsed the July rate cut and did absolutely nothing to pull the markets back from that expectation. There was little in the statement to imply what this means past the July meeting but we can infer that any further softening in the data past July will likely mean more action from the Fed at subsequent meetings,” noted Peter Boockvar, chief investment officer at Bleakley Advisory Group.
The Fed chairman’s statement was released ahead of his appearance before the House Financial Services Committee at 10 a.m. ET Wednesday and the Senate Banking Committee on Thursday….
The stock market hit a new high in its decade-long rally on Wednesday, as the benchmark S&P 500 stock index traded above 3,000 for the first time.
Investors are cheering the potential for an interest-rate cut, which would make stocks more appealing. In prepared testimony before Congress on Wednesday, Jerome H. Powell, the Federal Reserve chair, raised concerns about a global slowdown hurting the United States, laying the groundwork for a cut later this month.
In essence, investors are celebrating a weak outlook for growth as a result of the trade war, which the central bank recently said could discourage business spending and may be contributing to a manufacturing slowdown.
Few analysts expected the index to reach 3,000 so soon, but many see reasons for the gains to continue….