October 31, 2019— The Federal Open Market Committee (FOMC) cut the fed funds rate by 25 basis points, or bps, (0.25%) at its October meeting as expected, to a target range of 1.50%–1.75%. Similar to cycles in 1995 and 1998, when Federal Reserve rate reductions were seen as “insurance cuts” to ward off potential downturn, it has now cut rates three times, by a total of 75bps, leaving markets to wonder whether this “mid-cycle adjustment” has come to an end (Figure 1).
October 24, 2019— On Tuesday, October 22, by a vote of 329-299, the UK House of Commons approved in principle the revised EU Withdrawal Agreement (to implement “Brexit”) negotiated with the EU by Prime Minister Boris Johnson. The PM has managed to achieve what his predecessor, Theresa May, could not, even after three attempts.
October 14, 2019—The overall direction of the U.S.–China trade conflict is so central to our economic outlook that waiting to hear the outcome of last week’s trade negotiations felt a lot like the acute anticipation of waiting for a new baby to arrive.