Fed will stay on the sidelines for the foreseeable future - NBF

Analysts at National Bank of Canada (NBF) highlighted that this morning’s US GDP report seemed to support such a stance from the Fed, as consumers remained resilient in the face of slowing business investment.

Key quotes

"Once again, the statement acknowledged “solid” job gains and strong household spending but pointed out to still weak business fixed investment and exports. Notably, the sentence stating that the Fed would “act as appropriate to sustain the expansion” was removed from the statement."

"This may suggest a willingness to pause the easing cycle on the part of the Fed going forward. The decision was not unanimous: both Kansas City Fed President Esther George and Boston Fed President Eric Rosengren wanted to keep rates put. "

"In line with our own forecast, the Fed decided to cut rates today. Looking ahead, assuming no deterioration in the international outlook (read U.S.-China trade tensions), we believe the central bank will stay on the sidelines for the foreseeable future"