November 2019 Economic Recap
The Fed left interest rates unchanged at its most recent meeting, after cutting rates by 25 basis points at each of the three prior meetings. Chair Jerome Powell expressed comfort with the current stance of policy, indicating that the Fed had no plans to adjust rates in either direction in the near-term. Compared to September’s meeting the updated “dot plot” reflected a downward shift in expectations for rate increases, with the vast majority of FOMC members projecting no changes to interest rate policy in 2020. The Fed also ramped up its liquidity operations to deal with potential volatility at year end, pumping some $500 billion into funding markets via outright purchases and repos. This seems to have had the desired effects so far, as the much followed SOFR rate has traded within a tight band in recent weeks.
Outside the U.S. Japan’s economy grew at the slowest rate in a year, with the outlook uncertain given a recently implemented sales tax expected to weaken consumer spending and a decrease in demand from China among other factors. Germany just barely avoided a recession in the third quarter, with GDP up by an adjusted 0.1% on the quarter. This follows a 0.2% decline in the second quarter. All in all, the data across these countries suggests a slow world-wide expansion.
For a deeper consideration of the economic data released during November, please follow the links below: