Fed signals interest rate cuts possible later this year
By Howard Schneider and Jason Lange WASHINGTON (Reuters) - The U.S. Federal Reserve on Wednesday signaled it could cut interest rates by as much as half a percentage point over the remainder of this year, as it responded to increased economic uncertainty and a drop in expected inflation. The Fed, which held rates steady after the end of its latest two-day policy meeting, said it 'will act as appropriate to sustain' a nearly 10-year economic expansion and dropped a promise to be 'patient' in adjusting rates.
By Howard Schneider and Jason Lange
WASHINGTON (Reuters) - The U.S. Federal Reserve on Wednesday signaled it could cut interest rates by as much as half a percentage point over the remainder of this year, as it responded to increased economic uncertainty and a drop in expected inflation.
The Fed, which held rates steady after the end of its latest two-day policy meeting, said it "will act as appropriate to sustain" a nearly 10-year economic expansion and dropped a promise to be "patient" in adjusting rates. Nearly half its policymakers now show a willingness to lower borrowing costs over the next six months.
Even policymakers who did not write down a forecast for a rate cut this year believe "that the case for somewhat more accommodative policy has strengthened," Fed Chairman Jerome Powell said in a news conference following the meeting.
The baseline outlook remains "favorable," he said, and "there was not much support for cutting rates now at this meeting." But, he added, there will be plenty of incoming data in the near term that will help policymakers figure out if the risks of a less favorable outcome continue to rise.
"We will act as needed, including promptly if that's appropriate, and use our tools to sustain the expansion," he said.
Interest-rate futures surged after the Fed's policy statement and projections and Powell's remarks, showing traders are now betting heavily on three rate hikes by the end of the year.
(Reporting by Howard Schneider, Jason Lange and Ann Saphir; Editing by Paul Simao)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.