Mexican Media Brands
Fed Affirms Plan to Raise Interest Rates Slowly
Federal Reserve Chairman Jerome Powell affirms that the central bank plans to continue raising its overnight lending rates cautiously.
#economics
Share
Federal Reserve Chairman Jerome Powell affirms that the central bank plans to continue raising its overnight lending rates cautiously.
He says the Fed’s conservative policy seeks to avoid moving too fast on rates, which could shorten the country’s economic expansion, or too slowly, which might lead to excessive inflation. The bank most recently raised the rate in June by one-quarter point to 2.0%.
Powell’s comments come after President Donald Trump suggested that the bank halt further action. The Fed previously indicated its plan is to raise rates in quarter-point steps to 2.5% this year, 3.0% in 2019 and 3.5% in 2020.
The chairman says the central bank bases its action on several imprecise variable, including the “natural” unemployment rate and a “neutral” interest rate—and the determination to look beyond both for “signs of excesses.”
Powell explains the Fed’s current philosophy in medical terms. “When unsure of the potency of a medicine,” he says, “start with a somewhat smaller dose.”
RELATED CONTENT
-
China and U.S. OEMs
When Ford announced its 3rd quarter earning on October 24, the official announcement said, in part, “Company revenue was up 3 percent year over year, with net income and company adjusted EBIT both down year over year, primarily driven by continued challenges in China.” The previous day, perhaps as a preemptive move to answer the question “If things are going poorly in China, what are you doing about it?, Ford announced that it was establishing Ford China as a stand-alone business unit.
-
On The German Auto Industry
A look at several things that are going on in the German auto industry—from new vehicles to stamping to building electric vehicles.
-
Mazda, CARB and PSA North America: Car Talk
The Center for Automotive Research (CAR) Management Briefing Seminars, an annual event, was held last week in Traverse City, Michigan.