“If the impact of the tariffs - and whatever financial market reaction to those tariffs is - causes more of a slowdown, then we do have the tools available to us, including lower interest rates,” Boston Fed President Eric Rosengren, a voter this year on Fed rate policy, said in an interview with Reuters.
While Rosengren said he was “not necessarily” expecting a rate cut to be necessary, the market sell-off Monday was deep and potentially disruptive to the Fed’s core expectation that interest rates will remain on hold for some time to come.
...But a drop in inflation expectations is another matter, and could be evidence that households and businesses are losing faith in the Fed’s ability to deliver on its inflation goal - a worrying development for central bankers who feel their ability to keep expectations set around their inflation target is critical to meeting the goal.
Submitted May 13, 2019 at 08:59PM by COMPUTER1313 http://bit.ly/2WGndJH
