NEW YORK Philadelphia Federal Reserve Bank President Patrick Harker said on Tuesday he did not support the Fed's last rate cut in October and that the central bank should keep policy steady.
NEW YORK New York Federal Reserve President John Williams said Wednesday any changes in interest rates from here will depend on the incoming economic data but policymakers should be preemptive in taking steps to keep the expansion alive.
HOUSTON/NEW YORK After a year-long struggle with bond markets, the Trump administration, and each other, Federal Reserve policymakers found their way to a compromise this week with a rate cut that even the White House said had put monetary policy in a much better place.
NEW YORK/WASHINGTON Ask a Federal Reserve official if the clutch of interest rate cuts it has delivered this year are helping the economy and you will get a swift answer: Yes.
(Repeats with no change in content)
By Jonnelle Marte and Dan Burns
NEW YORK/WASHINGTON, Oct 31 Ask a Federal
Reserve official if the clutch of interest rate cuts it has
delivered this year are helping the economy and you will get a
swift answer: Yes.
Fed Chair Jerome Powell said as much on Wednesday after the
central bank cut borrowing costs for the third time since July,
saying officials "see now more clearly the effects of more
accommodative monetary policy on various kinds of consumer
"You are seeing strong durable goods sales. You are seeing
housing now contributing to growth for the first time in a
while. And you are seeing retail sales," Powell said at his news
conference following the Fed's interest rate announcement. "More
broadly, monetary policy is also supporting household spending
and home buying by keeping the labor market strong, keeping
workers incomes rising, and keeping consumer confidence at high
Indeed, there is evidence that Powell and his colleagues are
not tooting their own horns without some justification.
The housing market is showing green shoots as mortgage rates
have dropped. Car loans are in greater demand, and sales of
high-priced vehicles like pickup trucks are near a record.
Stocks are reaching fresh highs. Consumers, fortified by a
strong labor market, continue to spend.
It is not all wine and roses, however, as business spending,
which has been hit by the Trump administration's trade war with
China, has so far not responded to the Fed's easing with the
Here is a look at the various ways the central bank's rate
reductions are already showing up throughout the economy:
HELP FOR HOUSING
Lower mortgage rates are helping to revive activity in the
U.S. housing market, which stalled last year amid rising rates
and higher home prices. Home construction added to growth in the
third quarter for the first time in nearly two years, the
Commerce Department said on Wednesday.
The pending home sales index, which is based on contracts
signed in September, rose by 1.5% and is near a two-year high,
according to the National Association of Realtors. Still, a
shortage of homes for sale is limiting overall growth in the
The homes that are for sale are now becoming more affordable
because of lower mortgage rates.
A home buyer earning the national median income would need
to spend 20.7% of pay to make the monthly principal and interest
payment on an average priced home as of the end of September
when 30-year fixed rate mortgages were at 3.64%, according to an
analysis by Black Knight Inc. That is down from last November,
when payments ate up 23.7% of the median income and
affordability reached a nine-year low.
Refinancing activity is also up since August as homeowners
move to lock in lower rates and reduce their monthly payments.
DRIVING CAR AND TRUCK SALES
Banks are reporting resurgent demand for auto loans as rates
have fallen, according to the Fed's quarterly senior loan
officer opinion survey.
Spending on consumer durables that are sensitive to interest
rates, including cars, rose by an annualized rate of 7.6% in the
third quarter, according to a report from Morgan Stanley.
Total sales have rebounded from a four-year low earlier this
year and are back running at more than 17 million vehicles
annually. Sales of pickup trucks and sport utility vehicles,
which sport higher sales prices and now dominate the new-vehicle
market, were just shy of a record in September.
WEALTH AND EASY MONEY
The S&P 500 index closed at a record high on Wednesday after
the Fed announced the third rate cut. Investors are more
optimistic about the economic outlook after positive
developments in the prolonged trade dispute with China and the
risks of a no-deal Brexit decreased.
The Fed's actions to lower borrowing costs and improve
liquidity in money markets could also be contributing to
investor confidence. Some investors might be turning to stocks
in search of higher returns at a time when bond yields are low.
"If you have a need to generate some sort of meaningful
return, you're going to buy stocks," said David Spika, president
of GuideStone Capital Management.
Since January, when Powell and the Fed signaled they had
pivoted away from raising rates, conditions in key corporate
credit markets have eased substantially. The yield spread for
junk bonds - a measure of the added compensation investors
demand for owning risky corporate debt rather than safer
government bonds - has narrowed substantially.
WEAK SPOTS REMAIN
The big sore spot for both the Fed and the economy at large
is a reluctance by U.S. businesses to spend, a hesitance Fed
officials and corporate executives blame on Trump's
unpredictable trade policy.
In Wednesday's first reading of gross domestic product for
the third quarter, the Commerce Department said business
investment was a net drag on the economy for the second quarter
in a row. The last time that happened was a decade ago during
the Great Recession.
Businesses also appear hesitant to borrow to fund
investment. The Fed's latest senior loan officer survey showed
softening commercial loan demand for a fourth straight quarter,
and year-over-year growth in commercial and industrial loans
outstanding has fallen by half in the past six months.
(Reporting by Jonnelle Marte and Dan Burns; Editing by Peter
NEW YORK/WASHINGTON, Oct 30 The Federal Reserve
is expected to reduce interest rates on Wednesday, but new data
showing resilient U.S. economic growth may make that rate cut
the last for now.
Oct 30 When Federal Reserve officials conclude
their two-day policy meeting on Wednesday, they may at last have
succeeded in divorcing the actions they take in managing the
U.S. central bank's massive balance sheet from interest rate
The Federal Reserve Bank of New York is boosting the size of the cash injections it can make into overnight borrowing markets.
［ニューヨーク ２２日 ロイター］ - 景気後退の予兆として注目される３カ月物米財務省短期証券（Ｔビル）<US3MT=RR>と１０年国債<US10YT=RR>の利回りの逆転（逆イールド）が、１１日に解消した。投資家が景気の先行きに楽観的になったと解釈することもできるが、今回の逆イールド解消は市場のテクニカルな要因で引き起こされた面がある。このため一部の専門家は、米景気の足場が依然としてぜい弱かもしれないと警戒している。
NEW YORK A closely watched part of the U.S. bond market that is widely viewed as a recession indicator has recently stopped flashing red. But investors and economists say the economy is still not in the clear.