Highlights of the June 19, 2019 FOMC decision:
- Bullard dissents for cut
- Median dot is for no change in 2019, but nearly half see lower rates
- Median at end of 2020 is 2.1% vs 2.6% prior
- Drops language saying it would be 'patient' on rates
- Household spending appears to have picked up but business fixed investment has been soft
- Activity has been rising at a moderate pace
- Fed will act as appropriate to sustain economic expansion with a strong labor market and inflation near target
- Uncertainties have increased regarding outlook for sustained economic expansion
- Household spending appears to have picked up from earlier in the year
- Indicators of business fixed investment have been soft
- Survey-based measures of longer-term inflation expectations are little changed
The kneejerk is lower in the US dollar across the board but only 10-20 pips.
I'm surprised that survey-based measures of inflation were downgraded after the U Mich survey showed a fall. They may want to see more evidence before reacting to it.
Key passage:
The Committee continues to view sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective as the most likely outcomes, but uncertainties about this outlook have increased. In light of these uncertainties and muted inflation pressures, the Committee will closely monitor the implications of incoming information for the economic outlook and will act as appropriate to sustain the expansion, with a strong labor market and inflation near its symmetric 2 percent objective.
