Fed downgrades GDP growth projections, cancels rate hikes, stops balance sheet runoff, but “economic fundamentals are strong.”
The Federal Reserve is being “patient” with rate adjustments, spurring a range of theories from market experts.
Industrial production rose at a solid pace to round out 2018, helped by a jump in manufacturing activity during the month. The gain in output in December rounded out the strongest year for the industrial sector since 2010, and eased fears after a string of negative releases from manufacturing.
Imports into the U.S. grew an estimated 5-10 percent last quarter while U.S. exports to China fell 25-30 percent.
Regional surveys from Federal Reserve districts were mixed during the month, as softening conditions from the Philadelphia and Kansas City districts were offset by improvements in the Richmond and New York regions. Commentary from the regional surveys suggests tariffs, labor shortages, and the inability to find trucking capacity are curbing economic activity across the board, though growth remains generally positive.
Demand in the economy continues to grow at a solid pace at the start of the 3rd quarter, but a myriad of government survey results suggests that trucking capacity and concerns over tariffs have limited the performance of several sectors.
Responses from the Federal Reserve’s Beige Book on regional economic conditions show that recent tariffs and capacity issues in freight are starting to pressure businesses.
Regional manufacturing data from the Dallas and Richmond Fed suggests that manufacturing activity has cooled in March as the impact of tariffs has affected output
The Fed is expected to raise rates again this week. This move has been communicated for several months, but what the Fed says about future increases could have significant implications for freight markets and carriers
Conditions improved slightly for shippers in November according to FTR’s Shippers Conditions Index (SCI). The SCI recorded a -8.9 for November, slightly better than October but still solidly negative, the firm said.
At least for one week, seasonality has impacted rates, according to the latest data from DAT Solutions. Spot rates for dry vans and flatbeds fell for the week ending Jan. 20.
The Fed has raised interest rates to 1.25%–rates on new loans, equipment leases, old variable debt, and factoring services will all go up.
The Fed announced today that it will allow $10 billion of Treasury and mortgage-backed securities to mature each month without buying new ones as it cautiously approaches the wind down to avoid another financial collapse.
