Federal Reserve hikes Rate And Lowers The 2019 Projections To Two Rises

Federal Reserve hikes Rate And Lowers The 2019 Projections To Two Rises

Federal Reserve hikes Rate And Lowers The 2019 Projections To Two Rises

The Bank of England said on Thursday that Brexit uncertainty had "intensified considerably" over the last month, and trimmed their forecast for quarterly economic growth in the last three months of 2018.

U.S. President Donald Trump on Thursday said border security must be part of legislation to fund the U.S. government, a position that raises the threat of a partial federal shutdown on Saturday.

"I think he's put the Fed in a hard position because there's a pretty good case for not raising rates now", Nobel Prize-winning economist and New York Times columnist Paul Krugman told CNN this week, adding that not raising rates "would look like they're allowing themselves to be bullied".

"The Fed is going to be much more cautious about rate hikes next year as the economy slows significantly", Jones said.

When asked about pressure from the White House, Powell said "We're going to do our jobs the way we've always done them", stressing the importance of the Fed's independence from political pressure. "That doesn't take away the President's right to state his opinion on a particular matter".

"The risk-off environment and expectations for a slowdown next year should be supportive for gold", said Craig Erlam, an analyst at OANDA, adding that a bounce in the U.S. dollar had taken the edge off gold's recent rally.

He has also proactively upped his visits to Capitol Hill, meeting with lawmakers and their staff to understand and address their concerns.

Federal Reserve Chairman Jerome Powell will hold a press conference at 1930 GMT to explain the central bank's thinking. Wednesday's was the Fed's ninth hike since it began gradually tightening credit three years ago.

Jan Hatzius, chief United States economist for Goldman Sachs, recently wrote in a note to clients that given the "hot-and-cold messaging" from the committee, the press conference will be particularly important. In Fed parlance, it will be "data-dependent".

The Federal Reserve raised interest rates Wednesday for the fourth time this year, but signaled a more patient approach raising rates next year amid signs that the economy is starting to weaken. Auto and home sales have slumped as interest rates have climbed. Four of those increases have been under Powell.

The central bank is holding is final monetary policy meeting of the year on Tuesday and Wednesday.

"Feel the market, don't just go by meaningless numbers", Trump tweeted, adding "Good luck!" The central bank now appears to be eyeing at least two more rate hikes in 2019.

Presidents Lyndon Johnson and Richard Nixon fought with their Fed chairs. But its updated forecast projects just two rate hikes next year, down from three that the Fed had predicted in September. In one of them, he called it "incredible" that the Fed would consider raising rates again when "the outside world is blowing up around us".

What's unusual is the fact that Trump hasn't hesitated to unleash his fury publicly on Powell. saying he isn't even "a little bit happy" with him and calling his decision to raise rates a "mistake". The president has complained that the moves are threatening the economy. Those private misgivings have come in tandem with fury at Powell, who Trump blames for the situation.

USA stocks are on pace for their biggest December decline since 1931, the depths of the Great Depression. All the major averages are lower for the year, making this the first down year for stock investors in a decade.

US stocks had been up sharply before the Fed's announcement, but the Dow Jones Industrial Average closed down about 352 points.

Trump has repeatedly broken with the norm respected by USA presidents of recent decades who refrained from criticizing the Fed.

While economic conditions have not "changed enough yet to cause a dramatic slowing in growth" of the USA economy, "Fed officials are widely expected to deliver a 'dovish hike, '" Jim O'Sullivan of High-Frequency Economics said.

"This is a Fed that has gone through some pretty heavy criticism during the financial crisis, and they kept doing what they needed to do", said Diane Swonk, chief economist at Grant Thornton.

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