FRB 29th monetary policy meeting 3 consecutive interest rate cuts

FRB 29th monetary policy meeting 3 consecutive interest rate cuts will be judged on October 29th 5:05

The FRB = Federal Reserve Board, the US central bank, will hold a meeting to decide monetary policy from the 29th. In the United States, the negative impact on the manufacturing industry due to trade friction with China has become clear, and attention will be paid to whether or not the interest rate will be reduced three times in a row.

The FRB will hold a meeting to decide monetary policy from the 29th to the 2nd.

The FRB decided to cut interest rates for the first time in about 10 and a half years at the July meeting, and then decided to cut rates twice in a row to maintain economic expansion at the last month's meeting.

As for the US economy, this month's representative economic indicators of manufacturing deteriorated to a low level for the first time in 10 years, and tariff increases due to trade friction with China have adversely affected production and investment in manufacturing. It has become clear.

In light of this situation, FRB Chair Powell said earlier this month that he will “appropriately act to support sustainable growth,” which included implications for further rate cuts. In the report, the economic judgment was revised downward.

However, as the unemployment rate is 3.5%, the lowest level in a half-century, and the economy continues to expand, there is a cautious voice from within the FRB about additional rate cuts, and whether or not interest rate cuts will be made three times in a row. , Whereabouts of judgment will be noticed.

IMF downward revision of global economic growth

In the United States, the unemployment rate was maintained at 3.5%, the lowest level in half a century, but the trade friction with China had an adverse effect mainly on the manufacturing industry, and the US economy that led the world economy was modulated. It is seen.

The representative economic indicators for the US manufacturing industry announced on the 1st of this month have deteriorated to the lowest level since June 2009 for the first time in 10 years and 3 months.

In the background, trade orders in the United States and China and the slowdown of the global economy may weaken orders and production in the manufacturing industry.

FRB, the central bank, also revised its economic judgment downwards in the US economic report released this month, saying that companies in the Midwest were shutting down factories, shrinking operations and reducing transportation drivers. Did.

The IMF = International Monetary Fund has revised the global economic growth rate down by 0.2 points from the previous forecast to 3% due to trade friction between the United States and China.

This is the lowest growth rate in the last 10 years.

The US-China trade negotiations were canceled on the 11th of this month just before the start of the additional tariff measures by the United States as the first stage agreement was reached, but the situation changed to adding high tariffs to each other's imports. It is a situation that does not allow prejudice.

A cautious view of further rate cuts

On the other hand, there is also a cautious view of further rate cuts while the economy is expanding.

The FRB decided to cut the rate for the second consecutive time at the previous meeting, but three of the 10 people with voting rights voted against a 0.25% rate cut.

Two of them argued that interest rates would remain unchanged, pointing out the risk that interest rate cuts would expand household and corporate debt.

Furthermore, regarding the outlook for monetary policy ahead, more than half of the 17 people who attended the meeting expressed their view that rate cuts were not necessary, and opinions on economic recognition and additional rate cuts were broken within the FRB. It is.

On the other hand, the IMF = International Monetary Fund reported in this month's report that, following the reduction in US policy interest rates, the interest rate cuts continued among countries and increased investment in low-rated companies and real estate. .

The debts of companies that cannot be repaid when the economy in major countries in the world can repay can be as high as 2000 trillion yen in Japanese yen.