• Latest
  • Trending
That bad? How the U.S. economy stacks up to past rate cut cycles

That bad? How the U.S. economy stacks up to past rate cut cycles

July 29, 2019
Albanian Opposition Supports Government Earthquake Relief Efforts

Albanian Opposition Supports Government Earthquake Relief Efforts

December 3, 2019
IDF sends aid mission to earthquake-stricken Albania

IDF sends aid mission to earthquake-stricken Albania

December 3, 2019
Albania: Future uncertain for thousands of earthquake homeless

Albania: Future uncertain for thousands of earthquake homeless

December 3, 2019
YMCA Kosovo support Albanian families after deadly earthquake

YMCA Kosovo support Albanian families after deadly earthquake

December 1, 2019
Number of human trafficking cases dramatically increase in Belgium

Number of human trafficking cases dramatically increase in Belgium

December 1, 2019
EU mobilises emergency support to Albania after deadly earthquake

EU mobilises emergency support to Albania after deadly earthquake

December 1, 2019
Albania earthquake: Rescue efforts wind down

Albania earthquake: Rescue efforts wind down

November 30, 2019
Mayor Veliaj Uses Earthquake as Propaganda Opportunity

Mayor Veliaj Uses Earthquake as Propaganda Opportunity

November 30, 2019
Four Thousand Albanians Made Homeless after Devastating Earthquake

Four Thousand Albanians Made Homeless after Devastating Earthquake

November 29, 2019
Rama Announces Dubious Anti-corruption Legislation

Rama Announces Dubious Anti-corruption Legislation

November 29, 2019
Reports of Aid Being Refused in Camps, Arrests For Misapropriation

Reports of Aid Being Refused in Camps, Arrests For Misapropriation

November 29, 2019
Fear, evacuations and introspection in Albania after deadly quake

Fear, evacuations and introspection in Albania after deadly quake

November 29, 2019
Sunday, January 17, 2021
Tirana Chronicle
No Result
View All Result
  • Albanian News
  • World News
    • Africa
    • Asia
      • China
      • North Korea
    • Canada
    • Europe
    • Latin America
      • Mexico
    • Middle East
    • Russian Federation
    • United Kingdom
    • United States
  • National Security
    • Military
    • Politics
    • Terrorism
  • Business
    • Economy
    • Science
  • Sports
    • Soccer
    • Tennis
    • Olympics
  • Culture
    • Art
    • Books & Literature
    • Education
    • Family
    • Food & Drink
    • Health
    • History
  • Environment
    • Agriculture
    • Climate Change
    • Forests
  • Albanian News
  • World News
    • Africa
    • Asia
      • China
      • North Korea
    • Canada
    • Europe
    • Latin America
      • Mexico
    • Middle East
    • Russian Federation
    • United Kingdom
    • United States
  • National Security
    • Military
    • Politics
    • Terrorism
  • Business
    • Economy
    • Science
  • Sports
    • Soccer
    • Tennis
    • Olympics
  • Culture
    • Art
    • Books & Literature
    • Education
    • Family
    • Food & Drink
    • Health
    • History
  • Environment
    • Agriculture
    • Climate Change
    • Forests
No Result
View All Result
Tirana Chronicle
No Result
View All Result

That bad? How the U.S. economy stacks up to past rate cut cycles

July 29, 2019
in Business, Economy, Featured, News, United States
0
Home Business
Post Views: 5

RelatedPosts

World Bank lends $10 million to back women’s in Albania

Two of the world’s biggest economies at risk of recession

Europe Wants the Diesel That the U.S. Is Lacking Buyers For

Albania’s 7-mo trade gap widens 7.8%

Can Iran force Europe to defy US sanctions?

 

Spooked by a global economic slowdown, the U.S. Federal Reserve is seen launching on Wednesday its fifth interest rate-cutting campaign since 1995. It will come despite many signs of strength in the U.S. economy.

Policymakers at the U.S. central bank have made clear they think the nation’s labor market looks pretty solid. Some have said the Fed may cut rates just once this time.

A so-called insurance cut might be just enough to reduce the risks of recession, which have grown because of the Trump administration’s trade war with China and a slowdown in economies across Europe, Asia and Latin America.

How does recent data on the U.S. economy compare to what was happening ahead of the rate-cutting campaigns that started in 1995, 1998, 2000 and 2007?

Weak Inflation

U.S. consumer prices rose 1.5% in the 12 months through May, the same rate it has averaged since the Great Recession ended in June 2009. The Fed wants inflation at 2%, and weak price gains have become a defining characteristic of what is already the longest U.S. economic expansion on record. Inflationary pressures were higher in 1995, 1998 and 2007.

Low inflation plays into the Fed’s calculus in two ways.

First, the central bank might have room to maneuver. It can stoke economic growth with less worry about fueling above-target inflation. Second, some policymakers worry the persistence of weak inflation could be a signal they miscalculated how high interest rates should be to keep prices on target. That could mean they went overboard hiking rates between 2015 and 2018.

American manufacturing, which powers about a tenth of the U.S. economy, is the main sector already flagging under the weight of the global slowdown.

The recent slowdown echoes the pattern seen ahead of the rate cut cycles that began in 1995 and 1998. In 1995, the U.S. economy appeared to be slowing broadly and in 1998 the global economy had been weakened by an Asian financial crisis while a new financial crisis was under way in Russia. Following those two rate-cutting cycles, the United States did not fall into recession until 2001.

Labor Market Strength

Many economists look to weekly reports on new unemployment benefit claims for early indications the U.S. economy is slipping into recession. Like other labor market indicators, U.S. jobless claims currently are not flashing red. Nor did they ahead of recent rate-cutting cycles. Claims only rose substantially ahead of the 1995 rate cuts.

Buoyant Equities 

The Standard & Poor’s 500 stock index turned sharply lower ahead of rate cut cycles that began in 1998, 2000 and 2007. Recession struck during the latter two cycles. More recently, the stock market has remained buoyant, much like it did ahead of the 1995 rate cuts.

Expansive Outlook 

Even when grouping together a number of so-called leading indicators – from the labor market, factory shipments and interest rate spreads among others – the U.S. economy isn’t showing much sign that a recession is looming.

The Conference Board’s index for the outlook turned south ahead of the 2007 cuts, which came just before the United States slipped into a profound recession.

Source :
Reuters
Tags: EconomyU.SU.S. central bankU.S. economyU.S. Federal Reserve
ShareTweetShare

Related Posts

Albanian Opposition Supports Government Earthquake Relief Efforts
Albanian News

Albanian Opposition Supports Government Earthquake Relief Efforts

December 3, 2019
IDF sends aid mission to earthquake-stricken Albania
Albanian News

IDF sends aid mission to earthquake-stricken Albania

December 3, 2019
Albania: Future uncertain for thousands of earthquake homeless
Albanian News

Albania: Future uncertain for thousands of earthquake homeless

December 3, 2019
YMCA Kosovo support Albanian families after deadly earthquake
Albanian News

YMCA Kosovo support Albanian families after deadly earthquake

December 1, 2019
Number of human trafficking cases dramatically increase in Belgium
Albanian News

Number of human trafficking cases dramatically increase in Belgium

December 1, 2019
Next Post
Regime attacks kill 6 in Syria’s de-escalation zone

Regime attacks kill 6 in Syria’s de-escalation zone

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

1 × two =

Translate

Popular Post

Albanian Opposition Supports Government Earthquake Relief Efforts
Albanian News

Albanian Opposition Supports Government Earthquake Relief Efforts

December 3, 2019
0

  Democratic Party leader Lulzim Basha stated the opposition supports the government in its efforts to help citizens affected by...

Read more
Albania government denies links to organised crime

Albania government denies links to organised crime

May 30, 2019
The Brief: Western Balkans – a test for the EU’s expansion appetite

The Brief: Western Balkans – a test for the EU’s expansion appetite

May 31, 2019
Armaldo Kllogjeri to hold recital at Tirana’s Amphitheatre

Armaldo Kllogjeri to hold recital at Tirana’s Amphitheatre

May 31, 2019
Abu Sayyaf’s Dutch hostage killed in firefight in Sulu

Abu Sayyaf’s Dutch hostage killed in firefight in Sulu

June 1, 2019
  • About Us
  • Creative Commons
  • Disclaimer
  • Privacy Policy
  • Terms & Conditions
  • Contact Us

Topics

Follow Us

About Us

Tiranachronicle.com is part of Tirana Chronicle Media Group LLC, which delivers daily news around the globe.

© 2011 Tirana Chronicle

No Result
View All Result
  • Albanian News
  • World News
    • Africa
    • Asia
      • China
      • North Korea
    • Canada
    • Europe
    • Latin America
      • Mexico
    • Middle East
    • Russian Federation
    • United Kingdom
    • United States
  • National Security
    • Military
    • Politics
    • Terrorism
  • Business
    • Economy
    • Science
  • Sports
    • Soccer
    • Tennis
    • Olympics
  • Culture
    • Art
    • Books & Literature
    • Education
    • Family
    • Food & Drink
    • Health
    • History
  • Environment
    • Agriculture
    • Climate Change
    • Forests

© 2011 Tirana Chronicle