[Los Angeles 15th Reuters]-Fed officials of the Federal Reserve Board (FRB) officials will be part of the US-China trade negotiations amid a two-week approach to the Federal Open Market Committee (FOMC) It seems that they are not enough to dispel the uncertainties about the future policy.
However, there is a considerable distance from the situation where the unemployment rate is at historically low levels and consumer spending is strong, so FRB officials consistently appeal for the need for additional rate cuts. Such a situation became clear in the statement of the official on the 15th.
After a lecture in Los Angeles, Daily President of the San Francisco Fed told the reporters, “At present, the economy is good. Monetary easing measures are appropriate.”
Also, the headwind toward the economy is “it seems that the momentum is somewhat weakened due to the progress of the UK ’s withdrawal from the European Union (EU) and the US-China trade talks.” Said he continues to face strong uncertainties about the future.
According to the indicator announced today, the US consumer is paying attention to low inflation, including the lowest level of inflation expected three years from the start of the survey.
However, inflation is still expected to return to the FRB target of 2%, and the rate cuts in July and September are expected to boost the longest economic expansion in US history.
“As for the policy outlook, we want to see the future indicators, because the economy is very good at the moment,” he said.
Meanwhile, St. Louis Fed President Brad, who spoke in London, expressed a pessimistic view. Like the Governor Daily, he noted that “transparency in the trade system” is a major risk to the US economy, and that risks such as continued low inflation and a slowdown in the global economy are still high.
Mr. Daily said the current policy was “slightly relaxed,” while President Brad said he perceived the possibility of “excessive tightening.”
On top of that, the FRB said, “There is a possibility to choose further mitigation measures in the future, but we will make a decision at each meeting.
The FRB is divided into two groups: Powell, who generally believes that the future is good, and those who think that further easing is necessary to avoid a recession. The former, Mr. Blood, is the latter.
The other group said that the FRB has already cut rates too much, and if excessively loose policies lead to excessive risk taking by investors and expansion of asset prices, it will lead to financial instability. Are concerned.
For the October 29-30 FOMC, market participants generally expect rate cuts.
