On Wednesday, the Federal Reserve decided to cut interest rates by 0.25%. This was met by disagreement by 3 members of the federal reserve, the highest number since Powell became chairman. Two of the officials were against the rate cut and wanted to hold rates steady whereas one official wanted a higher rate cut. Decreasing interest rates can increase the scope of investment. However, since it is the strongest tool in the Fed's disposal, it could potentially cause problems. If they invoke rate cuts too soon it may not have that strong an effect when the economy might need the stimulus,. The differences in opinion really do reflect the uncertainty in the global economy recently including the US-China trade and Brexit. What do you think? Is this decision premeditated or is this the right course of action all things considered?
https://www.wsj.com/articles/fed-sees-three-dissents-at-meeting-for-first-time-since-2016-11568834067?ns=prod/accounts-wsj
Always helpful to note the rate, which is set to target 1.75-2 in September, two cuts in a row. This might be the right move for the moment, as we are unsure what to expect in the coming months as gift-giving season soon approaches. Brexit is a whole 'nother can of worms, and this will certainly affect trade and thereby the rate. We shall see.
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