The Quick and Dirty Case For Cutting 50bps at the June 2019 FOMC meeting

Skanda Amarnath
Jun 10 · 7 min read

0. The Fed viewed financial conditions at its March and May meetings as appropriate to achieve its objectives.

1. Financial conditions have tightened since the May meeting, in spite of greater anticipation of Fed easing

Source: Goldman Sachs Investment Research, Bloomberg
Source: Bloomberg, Moody’s
Source: Bloomberg

2. The labor market is now clearly slowing, and the inflation outlook was already quite tame.

3. The underlying drivers of aggregate demand also suggest downside risks to the outlook

4. Risk management: the Fed can always hike, but it can’t always cut.

Skanda Amarnath

Written by

Skanda is the Director of Research & Analysis at Employ America. He was previously an economist at MKP Capital Management and a research analyst at the NY Fed.

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