US FRB Monetary Policy Meeting Rate cut once suspended or 10:43 on December 10
The FRB, the US central bank, will hold a meeting to decide monetary policy from the 10th. Chair Powell has suggested that the rate cuts that have been made three times in a row will be suspended, and there is an increasing view among market participants that interest rates will remain unchanged.
The FRB will hold a meeting to decide monetary policy on a 10-day to 2-day schedule.
In July, the FRB decided to cut rates for the first time in about 10 and a half years as a preventive measure to prevent a slowdown in the economy, and has continued to cut rates three times in a row until the previous meeting.
Regarding future monetary policy, President Powell stated that the unemployment rate has historically been at a low level and that housing investment has been picking up at low interest rates due to interest rate cuts. The policy is appropriate, ”suggesting that interest rate cuts will be suspended.
For this reason, there is an increasing view among market participants that interest rates will remain unchanged for the first time in six months.
On the other hand, this meeting will also present the outlook for monetary policy from next year.
With the risk of the US economy slowing down, such as trade disputes with China, attention is being drawn to what the participants of the meeting will show about the future of the economy and interest rates.
Is the economy well aware of the risks of low interest rates?
FRB Chair Powell's policy suggests that the rate cut should be suspended once because the low-interest rate risk is recognized as the economy continues to expand moderately.
The FRB decided to cut interest rates for the first time in about 10 and a half years in July as a precautionary measure to avoid a slowdown in the economy due to long-term trade friction between the US and China, and corporate capital investment declined. After that, we implemented three consecutive rate cuts in September and October.
As a result, in the latest economic indicators, the unemployment rate has remained at a low level of 3.5% for the first time in about 50 years, and the number of housing starts started in October against the backdrop of low interest rates due to interest rate cuts in housing investment, which had been slowing down. It started to increase by 3.8%.
Also, the policy rate has already been lowered from 1.5% to 1.75%, and the FRB meeting participants said that if the economy is expanding, further monetary easing will encourage excessive investment. Has been issued.
The New York Stock Market's Dow average stock price exceeded the $ 28,000 mark last month, but the IMF = International Monetary Fund has pointed out that "the US and Japanese stock prices are overvalued" Seems to be aware of the risks created by the low interest rate.
However, President Trump has expressed dissatisfaction with the FRB policy by giving examples of negative interest rates introduced in Europe and Japan.
The president also posted on Twitter on the 2nd of this month that "the FRB does not act in the same way as a country that devalues the currency, making it difficult for US manufacturing and farmers to export. FRB should cut rates more." As less than a year has passed, the pressure to expand the economy is getting stronger.