Dovish Bullard Wanted a 50 bps Rate Cut - Forex News by Strategia Forex

Dovish Bullard Wanted a 50 bps Rate Cut

Posted Friday, September 20, 2019 by
Skerdian Meta • 1 min read

Saint Louis FED president James Bullard is a dove; probably the most dovish member. The FED cut interest rates by 25 basis points (bps) and he was the only one who wanted a bigger cut this month. He issued his statement on the dissent just now, as follows:

  • I dissented the FED decision because a 50 bps rate cut was more appropriate
  • There are signs that US growth will slow in the near horizon
  • The manufacturing sector appears to be in a recession
  • Dissent also prompted by inverted yield curve, as well as low inflation
  • Says a 50 bps rate cut would provide insurance against slowing economy
  • It would also promote a more rapid return of inflation and inflation expectations

Yes, a larger cut might have been an option, but the problem is that the USD would turn extremely bullish after that, because that would be the last cut from the FED, while now the window of more cuts remains open. Anyway, I bet Bullard is among Donald Trump’s favourites at the FED.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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