Fed Chair Jerome Powell said yesterday that the US economic expansion “feels very sustainable” even though “clearly things are slowing a bit”. And, the economy “may just be gathering itself – there’s no reason why the expansion can’t continue”. He added “policy is not on a preset course” and reiterated “we will be data dependent, assessing the outlook and risks to the outlook on a meeting-by-meeting basis. He also noted Fed will soon announce measures to add to the supply of reserves over time. However, the balance sheet for reserve management purposes is “in no sense is this QE”.
Separately, Chicago Fed President Charles Evans said “I wouldn’t mind another cut. I could see it either way”. “It would help for a little more insurance. Is it necessary and essential? I’m not sure. But I’m certainly open minded to those arguments,” he added. Minneapolis Fed President Neel Kashkari said he was “generally in favor” of lower interest rates, but, “I don’t know how much lower they should go.”
