United States: The Fed pauses in its tightening cycle of monetary policy

Global - May 02 2019
  • #credit risk

Weekly food for thought
  • Credit Risk

United States: The Fed pauses in its tightening cycle of monetary policy

Despite a strong job report (non-farm job creations totalled 196,000 in March, a reassuring figure after the 33,000 creations for February) and a sharp rise in wages (the average hourly wage posted an increase of 3.2% on a year-on-year basis), the Fed is pausing in its cycle of tightening the monetary policy. Indeed, following this year’s third meeting of the Monetary Policy Committee, the Fed maintained, in a unanimous decision, its overnight rates in the range of 2.25% to 2.50%, repeating that the institution would be patient towards determining future adjustments.

Key interest rates vs. inflation: the tightening cycle pauses!

The Fed did not respond to earlier injunctions from Donald Trump, demanding that the Central Bank cut interest rates. The institution, independent of the executive, will not lower its rates on the basis of a tweet, even if it is a tweet from the President of the United States… The manufacturing activity slowed more than expected in April, falling to its weakest pace since the election of Donald Trump, according to the manufacturing ISM index. And inflation is low. But, as Rabobank points out, the United States economy is not going so badly: “If we compare the pace of growth over one year, the 1.2% of the eurozone is significantly below the 3.2% published the week last for the United States.”

All in all, if inflation were to fall further, a rate cut could be discussed at Fed's next monetary policy committees. On the other hand, high wage inflation, a good measure of inflationary pressures at work, points to a rise in inflation in the second half of the year. Anyway, Donald Trump can boast of having inspired a pause at the Fed in its cycle of tightening monetary policy.

Julien Moussavi, Head of Economic Research
Source: Datastream, Beyond Ratings

Read integrality of weekly digest

Our latest
publications

Title
Category
Tag
Country
Date
Weekly food for thought
#ESG
Global
2019-05-20
Weekly food for thought
#Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#ESG
Global
2019-05-20
Weekly food for thought
#GDP
Europe
2019-05-20
Analyst insight
#ESG
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #ESG
France
2019-05-20
Weekly food for thought
#Credit Risk
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#ESG
Europe, USA
2019-05-20
Weekly food for thought
#GDP
France
2019-05-20
Analyst insight
#Environment
France
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#Carbon/Climate Change - #ESG
Global
2019-05-20
Weekly food for thought
#Credit Risk - #GDP
China
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#ESG
USA
2019-05-20
Weekly food for thought
#GDP
Global
2019-05-20
Analyst insight
#Credit Risk - #Sovereign Debt
Global
2019-05-20
Weekly food for thought
#Carbon - #Climate - #IPCC - #WMO
Global
2019-05-20
Weekly food for thought
#Carbon - #Inequality - #Paris Agreement
France
2019-05-20
Analyst insight
#GDP - #Sovereign Debt
USA
2019-05-20
Weekly food for thought
#GDP - #Sovereign Debt
Italy
2019-05-20
Analyst insight
#Credit Risk - #GDP - #Geopolitics - #Sovereign Debt
Global
2019-05-20
Weekly food for thought
#Environment
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #GDP
Global
2019-05-20
Weekly food for thought
#GDP
France
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Environment
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Environment
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Environment
Global
2019-05-20
Analyst insight
#GDP
Brasil
2019-05-20
Weekly food for thought
#Environment
Venezuela
2019-05-20
Weekly food for thought
#Environment - #Natural Capital
Norway
2019-05-20
Analyst insight
#Carbon - #Carbon/Climate Change - #Climate
United Kingdom
2019-05-20
Weekly food for thought
#Agriculture - #Biodiversity - #Climate - #GHG - #Greenhouse gases
Global
2019-05-20
Weekly food for thought
#Biodiversity - #Climate - #Environment - #ESG - #IPCC - #Oceans - #SIDS
Global
2019-05-20
Weekly food for thought
#Credit Risk - #GDP
France
2019-05-20
Weekly food for thought
#Carbon/Climate Change
Europe
2019-05-20
Weekly food for thought
#Carbon/Climate Change
France, Canada
2019-05-20
Weekly food for thought
#Credit Risk - #GDP
Argentina
2019-05-20
Analyst insight
France, Egypt
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate
France
2019-05-20
Weekly food for thought
#GDP - #Sovereign Debt
Germany
2019-05-20
Weekly food for thought
#Environment - #ESG
Global
2019-05-20
Analyst insight
#GDP - #Natural Capital - #Sovereign Debt
South Africa, France
2019-05-20
Weekly food for thought
#Credit Risk - #Sovereign Debt
United States
2019-05-20
Weekly food for thought
#Carbon/Climate Change
Global
2019-05-20
Weekly food for thought
#Carbon/Climate Change - #Environment - #ESG
Global
2019-05-20
Weekly food for thought
#Carbon/Climate Change - #Climate
Global
2019-05-20
Weekly food for thought
#ESG
India
2019-05-20
Weekly food for thought
#Credit Risk - #GDP
USA, Japan, European Union
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #GDP - #Paris Agreement - #Sovereign Debt
Global
2019-05-20
Weekly food for thought
#Climate - #Environment - #Paris Agreement
Small Island Developing States, Global, Barbados, Fiji
2019-05-20
Weekly food for thought
#Credit Risk - #GDP - #Sovereign Debt
Venezuela
2019-05-20
Analyst insight
#Carbon - #Carbon/Climate Change - #Climate - #Credit Risk
Global
2019-05-20
Analyst insight
Global
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate
Global
2019-05-20
Weekly food for thought
#Credit Risk - #GDP
Global
2019-05-20
Analyst insight
#Biodiversity - #Environment - #Natural Capital
Brazil
2019-05-20
Weekly food for thought
#Credit Risk - #Sovereign Debt
United States
2019-05-20
Weekly food for thought
#Carbon/Climate Change
Global
2019-05-20
Analyst insight
#Credit Risk - #Sovereign Debt
United States
2019-05-20
Analyst insight
#Carbon/Climate Change - #Credit Risk - #ESG - #Natural Capital
Global
2019-05-20
Analyst insight
#Carbon - #Carbon/Climate Change
Europe
2019-05-20
Weekly food for thought
#Carbon - #Carbon/Climate Change - #Climate - #Paris Agreement
France
2019-05-20
Weekly food for thought
#Credit Risk - #Sovereign Debt
Europe
2019-05-20
Weekly food for thought
Global
2019-05-20
Analyst insight
Global
2019-05-20
Weekly food for thought
France
2019-05-20
Weekly food for thought
#Carbon/Climate Change - #ESG
Global
2019-05-20
Weekly food for thought
Global
2019-05-20
Weekly food for thought
Global
2019-05-20
Weekly food for thought
Global
2019-05-20
Analyst insight
#Biodiversity - #Climate - #Environment - #Natural Capital - #Paris Agreement
Global
2019-05-20
Weekly food for thought
United States
2019-05-20
Weekly food for thought
Italy
2019-05-20
Weekly food for thought
Global
2019-05-20
Analyst insight
Middle East & North Africa
2019-05-20
Weekly food for thought
Global
2019-05-20
Weekly food for thought
Global
2019-05-20
Research note
#Carbon - #Carbon/Climate Change - #Climate - #Paris Agreement
Global
2019-05-20
Weekly food for thought
Global
2019-05-20
Analyst insight
All
2019-05-20
Weekly food for thought
United States
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
#Carbon/Climate Change - #Climate - #Credit Risk
England
2019-05-20
Weekly food for thought
Global
2019-05-20
Weekly food for thought
Germany
2019-05-20
Analyst insight
Brazil
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Italia
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Canada
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Analyst insight
Sweden
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Italia
2019-05-20
Analyst insight
All
2019-05-20
Weekly food for thought
USA
2019-05-20
Analyst insight
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
United Kingdom
2019-05-20
Weekly food for thought
United Kingdom
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Research note
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Russia
2019-05-20
Analyst insight
Argentina
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
European Union
2019-05-20
Analyst insight
European Union
2019-05-20
Analyst insight
Greece
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
European Union
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Cuba
2019-05-20
Weekly food for thought
All
2019-05-20
Analyst insight
Greece
2019-05-20
Weekly food for thought
European Union
2019-05-20
Weekly food for thought
French Guyana
2019-05-20
Weekly food for thought
#Sovereign Debt
Russia
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
Venezuela
2019-05-20
Analyst insight
All
2019-05-20
Weekly food for thought
United Kingdom
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
France
2019-05-20
Weekly food for thought
European Union
2019-05-20
Weekly food for thought
All
2019-05-20
Weekly food for thought
France
2019-05-20
See more