INSUBCONTINENT EXCLUSIVE:
By Rich Miller and Christopher CondonFederal Reserve Chairman Jerome Powell is likely to signal again this week that monetary policy is on
hold, buttressing the belief that he may steer clear of action through 2020.
Surprisingly, that would be an historic anomaly for a United
States presidential election year
Rather than keeping its head down, the Fed has changed policy in one direction or another in each of the last 10 presidential polling years
Bush famously blamed then-Fed Chairman Alan Greenspan for costing him re-election in 1992 by failing to cut interest rates more aggressively
relentless public assault on the institution by President Donald Trump.
Breaking with more than a quarter century of precedent, Trump has
repeatedly lambasted the Fed and accused it of keeping credit too tight, most recently on Oct
31, the day after it reduced rates for the third time this year.
Powell will have a chance to make his case twice this week, on Wednesday
before the Joint Economic Committee of Congress and on Thursday to the House Budget Committee
Stock and bond prices have risen in recent days on signs that the United States economy is weathering a slowdown abroad and on hopes of a
Tannenbaum, chief economist with Northern Trust Corp
October employment report, which showed payrolls rising by 128,000 despite the loss of 41,600 jobs due to the since-ended General Motors Co
strike.
Solid PayrollsThe solid jobs report allayed fears that companies spooked by the worldwide slowdown would chop payrolls just as they
expansion on track in the face of cutbacks by businesses.
Coupled with the policy message coming from Powell, the improved economic data
prompted such Fed watchers as Michael Feroli of JPMorgan Chase - Co
target range.
In their September forecasts, policy makers saw the economy growing by 2% in 2020, inflation rising to near their 2% target
and unemployment ending the year at 3.7%, according to their median projection
10-11 meeting.
Speaking to Bloomberg Television on Nov
still saw downside risks to the outlook, Clarida also highlighted the financial strength of United States households
in the labor market and the consumer for the Fed to resume reducing rates
He expects policy to remain on hold next year even though he sees slowing growth pushing unemployment to 3.9%
It was 3.6% in October.
The bar to a rate hike seems even higher
when Greenspan lowered rates three times after raising them previously.
The final cut back then came in January 1996, the start of a
presidential election year
