Fed Cuts Rates Again To Boost A Slowing Economy

Fed cuts interest rates for 3rd time this year

Fed Cuts Rates Again To Boost A Slowing Economy

This means that while the Fed now expects to keep interest rates in December, thats not a strong commitment if major development changes the economic outlook.

United States stock futures nudged 0.07 per cent higher on Thursday in Asia after the S&P 500 rose 0.33 per cent to close at a record high on Wednesday for the second time in three trading sessions.

Retail trader positioningsuggests USD/JPY may continue to rally while USD/CAD may continue to fall.

CURRENCY: The dollar declined to 108.62 yen from Wednesday's 108.64 yen. Thus, the central bank may keep borrowing costs low for a while, although some Fed officials worry that low levels can make bubbles at risk by causing investors to look wherever they can for a higher rate of return. "For prices to accelerate, we need to break above $1,515, and if that is done, we should be able to get more fresh blood coming into the market".

"Committee will continue to monitor the implications of incoming information for the economic outlook as it assesses the appropriate path of the target range for the federal funds rate", the statement said.

The takeaway for investors was that while the Fed wants to pause, it will still cut rates if anything adverse happens, whereas it won't raise them even if the economy picks up steam - which was enough to propel the likes of the S&P 500 to new record highs. We're truly living in the Era of Miscommunication at the Fed. The FOMC has one more meeting this year in December.

Are future rate cuts likely?

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Foreign institutional investors bought equities worth Rs 1,870.87 crore on Thursday, exchange data showed. We are now, by far, the biggest and strongest Country, but the Fed puts us at a competitive disadvantage.

BOJ Holds Back on Rate Cut - For Now? Meanwhile, the hawkish voters (Esther George and Eric Rosengren) still preferred rates to remain steady, meaning that in aggregate, the central bank may be leaning toward leaving interest rates unchanged it December as it now stands. Traders are still anticipating action soon.

South Korea's central bank said the move somewhat removes uncertainties for both the Korean and global economies. It set the rate Japanese yen at 65.23 for 100 yens.

USD/JPY: Retail trader data shows 49.40% of traders are net-long with the ratio of traders short to long at 1.02 to 1. The offshore yuan last traded hands flat at 7.0477 per dollar. The combination of current sentiment and recent changes gives us a further mixed USD/JPY trading bias. The pair was already sharply higher for the day on the back of the Bank of Canada meeting. The US-China trade war's effects can already be felt, BOC policymakers noted, and that there were evidence suggesting that more hard may be ahead. To that end, the market has become much more adept at pricing in these rate cuts.

However, news that Beijing could remove extra tariffs imposed since previous year on USA farm products fanned hopes that a trade deal remains possible.

The decision to cut rates was not unanimous.

Refinancing activity is also up since August as homeowners move to lock in lower rates and reduce their monthly payments. Utilities, up 0.86%, was the best performing while the energy sector lagged, down 2.12%. In fact, job creation has remained solid.

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