Skip to comments.Dow tops 27,000 for first time after Powell signals rate cut
Posted on 07/11/2019 9:17:16 AM PDT by SeekAndFind
The Dow Jones Industrial Average topped 27,000 for the first time on Thursday as the top three equity benchmarks Opens a New Window. traded higher on Wall Street Opens a New Window. after Federal Reserve Opens a New Window. Chairman Jerome Powell Opens a New Window. signaled the central bank was still moving towards an interest rate cut due to trade uncertainties.
Following several days of uneven trading activity over concerns that the Federal Reserve would withhold moving forward on the expected cuts, investors were optimistic after Powells remarks that the central banks outlook for the U.S. economy is weighed down by trade tensions.
Many Federal Open Markets Committee participants saw that the case for a somewhat more accommodative monetary policy had strengthened," he said in prepared testimony for the House Financial Services Committee.
Powell also said a strong June jobs report did not change the central bank's economic outlook or policy on interest rates. He is scheduled to testify in front of a Senate panel on Thursday.
In economic news, initial claims for state unemployment benefits declined 13,000 to a seasonally adjusted 209,000 for the week ended July 6, the lowest level since April, the Labor Department said.
Shares of technology companies will be active after the French government on Thursday approved a new tax on those firms amid a probe into the measure by the U.S. government. The 3 percent tax on companies with roughly $845 million in global revenue and $281 million in digital sales in France will take effect retroactively to the start of 2019.
(Excerpt) Read more at foxbusiness.com ...
Strong but could be stronger. With little evidence of inflation (which is a sign of an “overheating” economy) rates should be reduced. Trump has been wanting this so we can maintain 3%+ GDP growth.
There’s no inflation, yet they raised rates 4 times. This raised the value of the dollar, thus putting us at a disadvantage over other currencies.
I think lowering rates would return us to where we should be.
Our economy should be stronger than it is.
This is about where investment money goes, NOT about making more money for investment. Lower interest rates simply means investment instruments based on interest rates, like bonds, will likely earn less than the year’s ROI on stocks - appreciation and dividends together. It does not produce “more” net earnings, as fixed interest earnings will likely dip correspondingly. So a rate cut causes reallocation of where invested dollars are, more so than creating any new dollars to invest.
Actually, I think a “stable currency” regime did not need any rate cut at this time. If I am right, Powell could maybe not be doing Trump any favors if the rate cut creates a bubble that bursts in the next twelve months.
Can anyone here with a basic understanding of economics explain why it makes any sense for the Fed to cut rates when the U.S. economy is strong?
Because the economy isn’t as strong as it should be.
The Federal Reserve is manipulating short term interest rates to be much higher than what the market would charge.
The Fed is purposely hindering growth because of their false premise that economic growth causes inflation.
Just let me and everyone retiree withdraw 10% of their IRA’s WITHOUT being taxed. The government otherwise won’t see the withdrawals until age 70/half. Do it 12 months b4 the election. Watch what happens. Tax cuts for the rich? Damn right.
To me also it does not make sense, at this time. I haven’t seen anything in any economic indicators that calls for it. Powell say trade issues are a concern is prejudging outcomes on negotiations that are ongoing. Once the negotiations end THEN there would be actual long term trade circumstances to consider. I think until today the Fed was showing patience, which it still should be doing.
RE: The government otherwise wont see the withdrawals until age 70/half.
And even then, they will be taxed, no?
Our economy is stronger than it appears to be.
Economic measurements, such as GDP, U-6 unemployment numbers, factory orders, are really gummint estimates, mostly from lifelong demonRATs that are burrowed deep in the bowels of the SWAMP.
Does anyone think that they don't 'shade' the numbers, depending on which party is in the White House?
It is absolutely impossible to know the GDP and even the gummint admits they fudge it and then 'corrects' it 5-6 weeks later.
I give the SWAMP DWELLERS absolutely no slack in their attempt to publish any numbers.
I say they do it intentionally, and it has a political slant and it always slants in one direction.
Did you notice how hard they tried to get last year's Annual GDP number under 3%. If that were obummer, they would have been looking for ways to pump it up.
Maybe he can just do it "until he needs glasses."*
*Mother walks in on son who is playing with himself. Mother says, "Stop that, you'll go blind!" Son replies, "Ah, Mom, can't I just do it till I need glasses?"
What was the Dow when Trump took office?
RE: What was the Dow when Trump took office?
The Dow closed at 19,827.25 on Inauguration Day, Jan. 20, 2017
NY Slimes just printed article on how the Economy and Job Market is really not that strong. The employment numbers don’t tell the true story.
“Unemployment is low, but that’s only part of he story” by Louis Uchitelle.
Except the published employment numbers were the whole truth when Obango was President...
"Inflation" is allegedly low, but I believe prices have gotten substantially higher over the last few years for things like homes, new cars and college tuition.
If the interest rate on a 30-year mortgage is 8%, someone can get a $250,000 mortgage for about $1,835/month. When interest rates are at 4%, that same monthly payment will get you a mortgage of about $385,000 -- a difference of $135,000.
Guess what happens when interest rates decline, folks. A home that used to cost $400,000 now costs $535,000. Of course, this doesn't count as "inflation" because home prices aren't actually included in the Consumer Price Index (CPI) used to compute inflation in the U.S.
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