Fx trading News:The Fed reports that the current monetary policy stance is appropriate!
2020-02-10 11:17 from：CAPSTONE author：Jack
Capstone Forex Trading News:The US Federal Reserve stated in its semi-annual monetary policy report on the 7th that after the Federal Reserve cut interest rates three times last year, the current monetary policy stance is appropriate. It can support the continued expansion of US economic activity, strong growth in the labor market, and inflation in a "symmetrical 2% target ".
The report shows that in the second half of 2019, the real gross domestic product (GDP) of the United States grew at a moderate rate, and the growth rate was slightly lower than in the first half of 2019 and 2018. Although consumer spending has increased moderately, corporate fixed asset investment has declined, reflecting uncertainties in trade policies and weak global growth.
The Fed said that the downside risks to the U.S. economic outlook appear to have weakened in the second half of 2019, mainly due to reduced conflicts in the field of trade policy, signs of stabilization in overseas economic growth and a reduction in financial conditions.
The report shows that US employment growth remained stable in the second half of 2019. Although the annual employment growth rate was slightly lower than in 2018, it was still higher than the expansion of the labor force. Inflation levels have remained stable, staying below 2%. The US financial system is also more resilient than before the 2008 financial crisis, but US corporate debt levels are still rising.
The Fed is also evaluating the outlook for the US economy in its report. The median forecast for real GDP growth in the United States in 2020 is 2% and 2021 is 1.9%. In addition, the median US unemployment rate forecast for 2020 is 3.5%, and the median forecast for core inflation after excluding energy and food prices is 1.9%.
The Fed said that last year the Fed cut interest rates at its meetings in July, September, and October, and cut the interest rate by 75 basis points. The current monetary policy stance is appropriate. As for how future interest rates will be adjusted, the Fed will continue to monitor the impact of subsequent information on the economic outlook. The median forecast for the federal funds rate in 2020 is 1.6% and 2021 is 1.9%.
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