Bad-ish news for the economy... was good news for stocks. Just in time for Spring Break, Federal Reserve officials caught up for a 2-day policy meeting last week and passed on a chance to increase interest rates. It's official — The Fed's now not expecting to raise rates at all in 2019.
Bank-handed compliment?... It kinda feels that way, Fed. The nation's central bank is keeping interest rates down, but not because the economy is in its happy place.
- The good vibes: Lower interest rates will help people/companies get loans, and they'll also make stocks more attractive compared to bonds.
- The bad vibes: But the Fed's keeping them low because the economy’s growing slower. In December, the Fed thought that GDP (which measures the economy's size) would rise by 2.3% this year. Scratch that. Now it's predicting just 2.1% growth.
Washington's not helping... DC drama is the cause for less-than-charming economic forecasts from the Fed.
- Economists realized the Mountain Dew surge of economic strength from the 2017 tax cut has worn off faster than expected.
- President Trump just tweeted he'd keep tariffs in place even if the US and China sign a trade deal. That's just as his two top trade negotiators fly out to Beijing this week.
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