Highlights of the FOMC statement on September 18, 2019:
- Fed funds target rate lowered to 1.75%-2.00%
- Prior Fed funds rate was 2.00%-2.25%
- IOER lowered to 1.80% vs 1.85% expected
- IOER spread widened to 20 bps
- Statement repeats that economic activity is rising at a moderate rate
- Repeats the labor market remains strong
- Repeats will act as appropriate to sustain expansion
- Repeats inflation running below 2%
- Bullard voted to lower rates more aggressively, George and Rosengren voted for no cuts
- George and Rosengren dissented previously for no cuts
- Says household spending been rising at a strong pace vs 'has picked up from earlier in the year' prior
- Adds that exports have weakened
- Business fixed investment 'has weakened' vs 'has been soft'
There isn't much of any kind of change in the statement. The market is focusing on the dot plot, which doesn't show another cut this year and only an 9-8 preference for no cut at all next year.
