Jun 24, 2019

The case for a Fed rate cut

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Data: St. Louis Federal Reserve; Chart: Axios Visuals

The Fed delivered its first conflicted policy decision under Chair Jerome Powell last week, when St. Louis Fed president James Bullard opposed the decision to keep rates at their current 2.25%–2.50% level.

Driving the news: Minneapolis Fed president Neel Kashkari, who is not a voting member of the rate-setting committee, went further on Friday, calling for an unorthodox 50-basis-point cut to U.S. overnight interest rates immediately.

What they're saying:

  • Bullard: "[B]oth the core and headline personal consumption expenditures (PCE) inflation measures have declined substantially since the end of last year and are presently running some 40 to 50 basis points below the FOMC's 2% inflation target. ... Market-based measures of inflation expectations have also weakened considerably and indicate an expected inflation rate substantially below the Committee's target."
  • Kashkari: "The Committee has consistently been too optimistic in forecasting inflation returning to 2 percent. ...[W]e have said that 2 percent is a target, not a ceiling, so if we are under or over 2 percent, it should be of equal concern."

The other side: Bullard and Kashkari both talked about the negative impact tariffs and the U.S.-China trade war could have on the economy, but neither mentioned the impact of tariffs on inflation.

  • What they're not saying: Tariffs are a tax on imported goods paid by U.S. businesses that new research from the New York Fed suggests would increase taxpayers' overall costs by $106 billion a year.
  • There was also no mention of ultra-low interest rates' failure to stimulate inflation in Europe and Japan, where central banks have held rates below 0 for years and look poised to take them even further negative in the coming months. Inflation has not risen to 2% sustainably in either place.

Go deeper: Why Minneapolis Fed President Neel Kashkari advocated for a rate cut

Go deeper

Trump announces 30-day extension of coronavirus guidelines

President Trump announced on Sunday that his administration will extend its "15 Days to Slow the Spread" guidelines until April 30 in an effort to stop the spread of coronavirus, which has now infected more than 130,000 Americans and killed nearly 2,500.

Why it matters: Top advisers to the president have been seeking to steer him away from Easter as an arbitrary deadline for the U.S. to open parts of its economy, amid warnings from health officials that loosening restrictions could cause the number of coronavirus cases to skyrocket.

Go deeperArrow36 mins ago - Health

Coronavirus dashboard

Illustration: Sarah Grillo/Axios

  1. Global: Total confirmed cases as of 5 p.m. ET: 716,101 — Total deaths: 33,854 — Total recoveries: 148,900.
  2. U.S.: Leads the world in cases. Total confirmed cases as of 5 p.m. ET: 136,880 — Total deaths: 2,409 — Total recoveries: 2,612.
  3. Federal government latest: The first federal prisoner to die from coronavirus was reported from a correctional facility in Louisiana on Sunday.
  4. Public health updates: Fauci says 100,000 to 200,000 Americans could die from virus.
  5. State updates: Louisiana governor says state is on track to exceed ventilator capacity by end of this week — Cuomo says Trump's mandatory quarantine comments "panicked" some people into fleeing New York
  6. World updates: Italy on Sunday reports 756 new deaths, bringing its total 10,779. Spain reports almost 840 dead, another new daily record that bring its total to over 6,500.
  7. What should I do? Answers about the virus from Axios expertsWhat to know about social distancingQ&A: Minimizing your coronavirus risk
  8. Other resources: CDC on how to avoid the virus, what to do if you get it.

Subscribe to Mike Allen's Axios AM to follow our coronavirus coverage each morning from your inbox.

Trump touts press briefing "ratings" as U.S. coronavirus case surge

Photo: Drew Angerer/Getty Images

President Trump sent about a half-dozen tweets on Sunday touting the high television ratings that his coronavirus press briefings have received, selectively citing a New York Times article that compared them to "The Bachelor" and "Monday Night Football."

Why it matters: The president has been holding daily press briefings in the weeks since the coronavirus pandemic was declared, but news outlets have struggled with how to cover them live — as Trump has repeatedly been found to spread misinformation and contradict public health officials.