At a news conference on July 31, 2019, U.S. Federal Reserve Chairman Jerome Powell explains the reasoning behind the central bank's decision to lower interest rates for the first time since the 2008 global financial crisis.
The last time the U.S. Federal Reserve cut interest rates, the global financial crisis was in its early stages, Beyonce’s "Single Ladies" topped the Billboard 100 list and George W. Bush still occupied the Oval Office. On July 31, more than a decade after that last loosening of monetary policy, the Fed announced a cut of 25 basis points in the federal funds rate. The decision was driven by several factors, including an increasingly dim outlook for global economic growth, further signs that U.S. inflation is softening and, of course, relentless pressure on the central bank by U.S. President Donald Trump to deliver a rate cut. The Fed’s decision will cascade across the world as other central banks feel pressure to match its moves in dealing with their own slowing economies. However, fears of a global currency war set off by a series of rate cuts are overblown. Nevertheless, Trump’s concerns...
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