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NewsBreak: Fed to Expand Balance Sheet 'Soon,' Powell Says

EconomyOct 08, 2019 02:56PM ET
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Investing.com – Federal Reserve Jerome Powell said the Fed will start expanding its balance sheet "soon" in response to funding issues and continued to suggest the economy remained on solid footing, with inflation firming over the past few months.

  • Powell said the central bank “will soon announce measures to add to the supply of reserves over time,” to proving liquidity in the repo market. This comes after a lack of funding saw repo rates spike as high as 10%, pushing the Fed’s benchmark funds rate above its targeted range by 5 basis points. He stressed that the move was not quantitative easing.

  • The Federal Open Market Committee continues to “see sustained expansion of economic activity,” but admitted there are risks to this favorable outlook, principally from global developments amid uncertainties around trade, Brexit, and other issues, Powell said.

  • Powell reiterated the central bank “will act as appropriate” to support continued growth, a strong job market, and inflation moving back to the symmetric 2% target.

  • The Fed chief also said that the impact on the economy of higher oil prices would still cause “dislocations and hardship for many, but with exports and imports nearly balanced, the higher price paid by consumers is roughly offset by higher earnings of workers and firms in the U.S. oil industry.”

  • The S&P 500 pared losses after Powell's remarks.

NewsBreak: Fed to Expand Balance Sheet 'Soon,' Powell Says
 

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Comments (6)
Silverbug 19
Silverbug 19 Oct 09, 2019 8:48AM ET
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QE to infinity is imminent. Got Gold?
Andrew carson
Andrew carson Oct 08, 2019 3:23PM ET
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The expansion is in the rearview mirror. Rate cuts are needed.
Che Tran
Che Tran Oct 08, 2019 3:23PM ET
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for what? why a cut when an economic genius like Trump says that it's the best economy in the history of mankind has ever known? I smell bs but you sure don't
gary bills
gary bills Oct 08, 2019 3:20PM ET
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QE4 again but don't call it QE4 would suggest that the ******is about to hit the fan
John Hamlett
John Hamlett Oct 08, 2019 3:19PM ET
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I don't think Jerome Powell's time machine is working.  The Fed's balance sheet is up about 200 billion in the last 8 weeks.
Patrick Higdon
Patrick Higdon Oct 08, 2019 3:19PM ET
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Yeahhh, that will fix it. Man I wish I could just print money to "increase my balance sheet."
King Power
King Power Oct 08, 2019 3:19PM ET
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"He stressed that the move was not quantitative easing." Yellow stain just can't convinced anyone anymore lol
 
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