With balance sheet in background, markets focus on Fed's rate decision
NEW YORK/WASHINGTON - The Federal Reserve is expected to reduce interest rates on Wednesday, but new data showing resilient U.S. economic growth may make that rate cut the last for now.
A closely watched measure of inflation ticked higher, to 2.2%, slightly above the Fed's 2% annual target. The S&P 500 indexhit a record high, and aspects of the bond market that had concerned Fed officials have growth steadily healthier since policymakers last met in September. Though the Fed does not set long-term interest rates directly, its management of short-term rates does influence how much banks charge for 30-year home mortgages and other important consumer financing tools.“The damage being done by the trade war is plain to see in the business investment numbers,” said Brian Coulton, chief economist with Fitch Ratings. “Consumer-facing indicators are holding up better ... Housing investment recovered ... likely boosted by lower rates.
The mingling of the two, in the minds of investors at least, had been a headache over the past year for Powell.
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