A Generational Change at the Fed
Comment of the Day

July 30 2019

Commentary by Eoin Treacy

A Generational Change at the Fed

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Eoin Treacy's view

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The global economy has slowed meaningfully, Germany is flirting with a recession and China’s economy is suffering from the trade war. All other factors being equal it would be very hard for the Fed to continue to raise rates against that background. The upward pressure that would put on the Dollar would unwind any relative strength argument that is supporting the USA’s growth differential. Therefore, the Fed is at the top of the interest rate cycle and regardless of whether they cut by 25 or 50 basis points tomorrow, a new trend of cuts rather than hikes is emerging.

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