The Fed will cut managed rates by 25 basis points even as economic data reflects strength.

The FOMC meets this week with everyone expecting a cut of 25 basis points in managed rates. Investors will be very disappointed if the Fed does not move. The Fed does not like to surprise financial markets and have sent no signals they are not going to move. This is in spite of economic data that does not support the change in monetary policy. This will be the first managed rate reduction in more than 10 years and follows 9 increases in rates since 2015. The Fed believes the reduction is necessary to insure economic growth continues in the U.S. The uncertain trade wars and slow global growth are feared to cause a slowing growth in the U.S.

 

PROBANK AUSTIN ADVISOR - JULY 29, 2019