FOMC

A former top Federal Reserve official, who oversaw the U.S. central bank’s trading desk, has warned that the type of actions taken so far to quell this week’s turmoil in money markets may not be enough to keep conditions calm and fresh debt purchases may be needed.

The Federal Reserve announced a series of overnight and term operations for the next three weeks, signaling that it has control over this vital corner of the financial markets.

The Federal Reserve took center stage again Friday, with two presidents explaining why they dissented at the latest meeting and Vice Chair Richard Clarida terming it “healthy” debate.

Observers said the opponents of further rate cuts on the Fed tend to be the non-voters.

The market got what it expected and can now shift attention to the week's remaining deals after Fed policy makers cut interest rates by a quarter point.

The FOMC voted to cut the target range 25 basis points to 1.75% to 2% as “uncertainties” offset prospects for “sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective.”

U.S. money markets showed some signs of calm as the Federal Reserve injected another $75 billion of liquidity and key rates pulled back from troubling levels.

Few deals priced, as trading was subdued before the Federal Open Market Committee’s interest rate decision.

A rate cut alone probably won't avert a recession. A rate cut combined with a ceasefire in the trade war might, according to one market strategist.

The Federal Open Market Committee meeting featuring the release of a new Summary of Economic Projections should give the market a better clue as to whether the expected rate cut is part of a mid-cycle adjustment or the second step in an easing cycle.