FOMC

Trade and geopolitical disruption will likely consume much of the policy narrative the rest of this week.

As expected, the Federal Open Market Committee cut the fed funds rate target 25 basis points to a range of 1.50% to 1.75%.

Consumer confidence remained high even after a dip this month, and a rate cut by the Federal Reserve could send it higher.

Reads of the economy show continued weakening, which will allow the Federal Open Market Committee to cut the fed funds rate target 25 basis points to a range of 1.5% to 1.75%.

While a rate cut is likely next week, dissent on the Federal Open Market Committee may hold the key for future moves.

The Fed has been trying to rein in volatility in the market and keep the fed funds rate within its target range.

Negative rates could add to central banks’ toolbox in the next recession, though the Federal Reserve would prefer asset purchases and forward guidance.

Monetary policy may not be the answer for what ails the economy, Federal Reserve Bank of Kansas City President Esther George said Friday.

While the economy continues to expand “at a slight to modest pace,” those surveyed lowered their outlooks for growth over the coming year, according to the Fed's Beige Book.

With talk of a possible mini deal on trade with China and the Federal Reserve announcing it will buy about $60 billion of Treasury bills each month to build its reserves, the 10-year Treasury note was yielding more than three-month bills on Friday for the first time since July.

Part of the problem could be “the apparent failure of mainstream economic models to capture fully the current reality.”

The minutes from the latest Federal Open Market Committee’s policy-setting meeting highlighted some disagreements between members.

The producer price index saw its largest monthly drop in four years.

The U.S. economy’s loss of momentum isn’t severe enough to warrant a further reduction to interest rates, two hawkish Federal Reserve board members said.

There are ways to promote the Federal Reserve’s independence, but it would require changes to the current system, which is based on a “fuzzy mandate,” according to members of the Shadow Open Market Committee.

Not all of the threats and challenges to the Federal Reserve’s independence and credibility are external, according to former Federal Reserve Bank of Philadelphia President Charles Plosser.

The economy is doing well and the Federal Reserve should hold rates for now, Federal Reserve Bank of Philadelphia President Patrick Harker said Friday.

Interest rates should be less than 1.5%, not the current 1.75% to 2%, according to Federal Reserve Bank of Minneapolis President Neel Kashkari.

If the Fed thinks it can simply print money to relieve the stress, it only proves Fed officials don’t fully understand the issue.

Former Federal Reserve policy maker Narayana Kocherlakota says that while the recent disruptions in U.S. money markets won’t undermine the central bank’s ability to achieve its goals, they underscore that something is wrong with the plumbing of the financial system.