Richmond Federal Reserve President Thomas Barkin said in a speech that the “national economy appears great”. Unemployment rate is at 50-year lows and GDP growth is solid. Consumers also “feel confident and are spending”. However, “international economies are weaker”, with “elevated” uncertainty particularly around trade. Business investment dropped in Q2.
Hence, with muted inflation risk, Barkin said, Fed decided to make a “mid-cycle reduction” in interest rates earlier this month. That goal was to provide a “little insurance for the continued growth of the economy and strength of the labor market.”
