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Fed Chairman Powell in his Denver speech likened now to mid 90s modest rate cuts and says that's the 'spirit' of current cuts. He sees no reason why the expansion can't continue and policy actions are providing support for the outlook.

Powell Speech

While “policy is not on a preset course,” Mr. Powell said, the Fed will “act as appropriate to support continued growth.”

Powell said the Fed will soon announce measures to add to reserves supply over time and not to don't confuse it with QE as it's a 'technical issue'. Sticking with the mantra he reiterated that policy is never on a pre-set course, it will change as appropriate.

The FOMC will assess outlook and risks on a meeting-by-meeting basis. He said that global developments pose risks to a favorable US outlook. Globally we are seeing the Brexit unrest, Hong Kong and Moscow demonstrations. Further to that we have the trade war between China and America.

“That time is now upon us,” Mr. Powell said. He added that the Fed “will soon announce measures to add to the supply of reserves over time.”

Powell repeated that the Fed monitors financial risks very closely, they're moderate overall. The Fed said job growth is slowing and the yield curve control is something worth looking at. Powell repeated that the Fed isn't in favor of negative rates

For future cuts the Fed funds futures market is pricing in a 77% chance of a cut on Oct 30. This will likely change dependant on the US-China trade meeting.

Source: CNBC

From The TradersCommunity News Desk

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