The Federal Reserve on Wednesday lowered interest rates for the second time this year, as it tries to guard the United States economy against trade-related uncertainty and slowing global growth. The central bank cut borrowing rates in late July for the first time since the financial crisis. The moves are part of an effort to keep borrowing cheap, credit widely available and business and consumers confident.
The global economy is slowing as manufacturing activity weakens, and political tensions, including President Trumps trade war with China, are creating uncertainty for businesses. That is slowing down investment, which could hold back growth in the future. However, for now the consumers are powering the economy ahead. Unemployment is low, wages are rising and households are spending. But surveys in recent months have shown consumer sentiment may be wavering. We know consumers fuel about 70 percent of the economy.
With this rate, do you think we should expect another reduction this year?
https://www.nytimes.com/interactive/2019/09/18/business/economy/fed-second-rate-cut.html
When the Fed lowers interest rates, they typically have the goal of stimulating economic growth. Lowering the interest rate is essentially decreasing the cost of investment, which encourages borrowing and investing. I would not be surprised if there is another reduction this year if the trade war with China continues to occur.
ReplyDeleteI agree with Ashleigh. My article talked about how investment for the second quarter was the weakest its been since 2015. I can see another reduction this year especially in order to stimulate investment.
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