Source: Bloomberg News
Four Fed Bank Presidents let investors know not to count on another Fed interest rate cut in October. Many have already criticized the Fed for the ½ point cut on September 18th as bailing out investors. Now Fed Bank Presidents are warning investors not to count on another decrease. The Federal Open Market Committee will meet again on October 30-31. Many traders are already indicating that they are planning on another rate cut next month by the Fed by another ¼ point.
In an event hosted by Market News International, St. Louis President William Poole said that the Fed will keep the economy “on a track of moderate average growth and gradually declining inflation over the next few years.” Furthermore, Poole said, “It was evident that we had a lot of turmoil in markets. We needed to help the market as best we could… The 50 basis-point cut …was necessary.” The Fed has expressed concern over unemployment and inflation and feel that instability in the economy makes the situation fragile. The Fed will discuss in their next meeting target inflation rates and attempt a gradual moving of the economy towards the target rates. “It would be a mistake for markets to bake into the cake the assumption of ongoing rate cuts,” Poole said.
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