Pivotal Interest Rate Cut by Fed

The Federal Reserve cut interest rates for the third time this year and explicitly indicated that the moves to ease policy could be approaching a pause and it wouldn’t condense them further unless the economy slowed sharply. Fed Chairman Jerome Powell believes that the current stance of the policy is likely to remain appropriate as long as the economy expands moderately and the labor market stays strong.

The US central bank announced its decision to cut its key overnight lending rate by a quarter of a percentage point to a target range of between 1.50 per cent and 1.75 per cent. Their aim to take this step is to help keep the economy strong in the face of global developments and to provide some insurance against ongoing risks. The yield on the 10-year Treasury note is now down to 1.77% from 1.80% and the US dollars gained. While lower rates do little to combat the uncertain trade picture, unemployment has continued to drop, consumer spending has remained solid and lower mortgage rates have revived the housing market. In addition to the solid performance in the jobs market and in consumer spending, stock market averages are around new highs.

But this plunging might come off as a disappointment to Mr. Trump who has pushed hard for the Fed to keep cutting rates and to resume the quantitative easing program the central bank used during and after the financial crisis to stimulate the economy. Two of the Fed's policymakers dissented from the decision: Regional presidents Esther George of Kansas City and Eric Rosengren of Boston voted against a reduction, with both maintaining the stance that the committee should have held the line at the previous rate. With the US economy showing solid economic growth in the third quarter, market participants are debating whether or not another interest rate cut is necessary.

Comments

Significance of the “Developed Country” Tag for India

By Xeena Mehta The officials of the United States Trade Representative (USTR) uphold a list of countries that categorises countries as “developing”, “developed”, and “least-developed”. Countries that are classified as “developing” have permissions to export certain goods to the U.S. without being hit by heavy legal tariffs that are bind to be imposed on goods from “developed” countries. The “developing country” tag was originated by U.S. Trade Act of 1974, to aid poor countries develop faster. World Trade Organization also acceded to grant trade benefits to countries that were classified as poor. If noticed we can see that about two-thirds of countries that are members of the WTO classify themselves as “developing” countries and avail fore deals. Any such classification of whether a country is “developing” or not is entirely objective. While the economic progress achieved by India and China have achieved over the last few decades is seen as a valid reason to get rid of their s...

Changing Environment For Local Business In Sri Lanka; Government Initiates The Revolution

Local industries and businesses are the backbone of the economy of any country. Additionally, Sri Lankan Government defines a local company as one with a minimum ownership of 51% of a Sri Lankan. To help these companies grow, the Sri Lankan Finance Ministry has proclaimed a circular enlisting the priorities to the local companies. Moreover, this move from the government may bring some salient alterations in the condition of the local manufacturers. The government has also come with up steps that will augment the local industries across the different domains. These domains include IT sector, construction, etc. The circular, as issued by the government includes relevant documentation regarding sourcing of resources and products. Additionally, sources point towards the fact that the government is hoping to extend support to the domestic sector and help them grow. Besides, the major focus is on the three sectors- IT software and hardware, construction and furniture and allied products. Pos...

SECOND WAVE OF VIRUS LEFT INDIA’S HOSPITALS IN TROUBLE AS SHOTS RUN LOW.

India is facing a health crisis because of the second wave of the virus which is hitting high records. Hospitals around the country are facing a huge shortage of care beds and intensive drugs. From the wealthiest state Maharashtra to the most populated state Utter Pradesh there has been a shortage of hospital care beds and immunization centers which results in turning away people as they are running out of vaccines. Maharashtra’s health minister Rajesh Tope has announced a strict weekend lockdown in order to control the situation. Mumbai has currently used up all but 3% of its intensive care hospital beds. Mr. Rajesh Tope has warned the state that they have three days’ worth of shots in stock and vaccination centers across the state are being forced to close down. Chief minister Punjab said that the Punjab’s vaccine will last another five days, urging the government to increase the supply. New Delhi -the capital of the country is also facing a lot of troubles due to the virus. At ...

Entrepreneur Digest

Search This Blog