The Federal Reserve will hold a public press conference later today, in which it is expected that a fourth and final rate hike for 2018 will be announced. While a slightly higher interest rate is all but guaranteed, there are many in the finance world who want the Fed to slow down its increases, for fear that an aggressive approach will crash the economy.
President Trump has also been vocal about the situation and has urged the Fed to think carefully about its next move.
President Trump Warns Fed to Avoid Making a Mistake
President Trump has tweeted twice regarding the Fed this week. On Monday, he pointed to a strong dollar and urged the Fed to accept the fact that America is doing well economically.
He posted that “It is incredible that with a very strong dollar and virtually no inflation, the outside world blowing up around us, Paris is burning and China way down, the Fed is even considering yet another interest rate hike. Take the Victory!”
Trump, and many investors, believe that is following a policy that doesn’t align with current conditions. The Fed’s rate hikes have also partially contributed to stock market volatility this year. If the trend continues, then this December would be the worst for the stock market since 1921.
The President was active on Twitter again on Tuesday, stating that “I hope the people over at the Fed will read today’s Wall Street Journal Editorial before they make yet another mistake. Also, don’t let the market become any more illiquid than it already is. Stop with the 50 B’s. Feel the market, don’t just go by meaningless numbers. Good luck!”
The mentioned editorial was published on Monday and implored Federal Reserve insiders to pause their aggressive monetary policy. The Journal pointed to several signs that current policy is doing more harm than good.
All Eyes on the 2019 Outlook
While it’s widely expected that rates will increase later today, the Fed’s outlook on 2019 is the bigger story. Many investors will use today’s announcement to predict monetary policy over the coming year. If it can indicate a more dovish approach, it could inject confidence back into the market and offer some hope of an early 2019 recovery for many stocks.
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