The US Federal Reserve on Wednesday slashed interest rates for a third time this year to help maintain US economic growth in the face of external risks and trade threats.
Powell’s dovish stance
US central bank cut its key overnight lending rate by 25 basis points to a target range of between 1.50% and 1.75% but signaled there would be no more reductions for the rest of 2019, unless the economy goes south.
“We believe that monetary policy is in a good place. We took this step to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks. We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook,” Fed Chair Jerome Powell told a press conference after the decision.
In a statement, the Fed erased a previous phrase that it “will act as appropriate” to sustain the economic expansion and said instead that it will “monitor the implications of incoming information for the economic outlook as it assesses the appropriate path” for the target interest rate. Kansas City Fed President Esther George and Boston Fed President Eric Rosengren, who had dissented from all cuts this year, voted against the decision.
BoJ says ready to act
The Bank of Japan (BoJ) kept its monetary policy steady and its short-term rate target at -0.1% on Thursday in line with expectations.
However, the bank whose decision followed that of the Fed provided a strong signal that it may cut the rates deeper into the negative territory in the future.
China purchase of US farm produce
Cao Derong, President of the China Chamber of Commerce for Import and Export of Foodstuffs, a government-backed association told Reuters on Wednesday that Beijing could remove the extra tariffs and let the companies make the purchases based on their own will.
That would allow Chinese importers to bring in $50 billion worth American agricultural products that US President Donald Trump insists on before signing a preliminary deal.
US oil inventories
The US Energy Information Administration reported on Wednesday that crude inventories rose by 5.7 million barrels in the week ending on October 25th. The production expectations were half a million barrels.
Chile cancels APEC summit
Chilean President Sebastian Pinera on Wednesday announced that his country will not be able to host the Asia-Pacific Economic Cooperation Summit (APEC) and United Nations Framework Convention on Climate Change (COP25) due to protests that have paralyzed the South American nation.
APEC was to be held from November 11 to 17 and Trump was hoping to sign the Phase-1 trade deal with his Chinese counterpart Xi Jinping there and then.