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  • 2:30.

  • EDWARD LAWRENCE LIVE AT THE

  • FEDERAL RESERVE.

  • REPORTER: THE FEDERAL RESERVE

  • CUTS BENCHMARK RATE A QUARTER OF

  • A PERCENTAGE POINT.

  • THE FEDERAL FUNDS RATE IS 1.75%

  • TO 2%.

  • FED OFFICIALS ARE NOT

  • FORECASTING A RATE CUT THIS

  • YEAR, ANOTHER RATE CUT THIS

  • YEAR.

  • THEY'RE ALSO NOT FORECASTING ANY

  • RATE CUTS IN 2020.

  • THEY'RE SEEING A RATE HIKE IN

  • 2021.

  • A VERY DIVIDED FED OVER THE

  • FUTURE PATH OF RATES.

  • THEE FED MEMBERS HAVE DISSENTED

  • ON THIS.

  • NEIL: JAMES BULLARD, ESTHER

  • GEORGE AND ERIC ROSENGREN

  • DISSENTED.

  • BULLARD WANTED TO SEE A 50 BASIS

  • POINT CUT.

  • ROSENGREN AND GEORGE WANTED TO

  • LEAVE THE RATES WHERE THEY WERE.

  • SEVEN OFFICIALS SEE ONE MORE

  • RATE CUT THIS YEAR.

  • THEY NEEDED TWO MORE TO HAVE

  • EXTRA RATE CUT.

  • FIVE OFFICIALS BELIEVE THE

  • FEDERAL FUN RATE SHOULD BE AT

  • SAME RATE.

  • FIVE WOULD LIKE TO SEE THE RATE

  • AT LEVEL IT WAS BEFORE THIS

  • MEETING TODAY.

  • NOW THE FEDERAL RESERVE RAISES

  • THE GDP FORECAST TO 2.2% THIS

  • YEAR.

  • ALSO SEE THE UNEMPLOYMENT RATE

  • NUDGING UP TO 3.7% BY THE END OF

  • THE YEAR.

  • CORE INFLATION THEY DO BELIEVE

  • STAYS THE SAIL AT 1.8% BY THE

  • END.

  • YEAR.

  • IN THE STATEMENT EVERYTHING WAS

  • BASICALLY THE SAME THERE EXCEPT

  • THEY ADDED THE FIXED BUSINESS

  • INVESTMENT AND EXPORTS HAVE

  • WEAKENED, CHANGING FROM SOFT,

  • FEDERAL RESERVE SAYS THEY WILL

  • ACT AS APPROPRIATE TO STAY IN

  • EXPANSION.

  • NOW ON THE SHORT-TERM FUNDING

  • COSTS THAT YOU WERE TALKING

  • ABOUT, CHARLES, THE FEDERAL

  • RESERVE LOWERED INTEREST ON

  • EXCESS RESERVES.

  • LOWERED INTEREST ON EXCESS

  • RESERVES BY 30 BASIS POINTS.

  • THE FEDERAL RESERVE SETS IT 20

  • BASIS POINT UNDER THE TOP RANGE

  • OF THE FEDERAL FUNDS RATE.

  • THEY WILL CONTINUE THE OVERNIGHT

  • REPO OPERATIONS TO STABLIZE THE

  • FEDERAL FUNDS RATE.

  • THEY SET THE RATE ON THE

  • OVERNIGHT REPOS FIVE POINTS

  • UNDER THE BOTTOM, 1.7% TO KEEP

  • IT WITHIN THE FEDERAL FUNDS RATE

  • RANGE.

  • THE FEDERAL REPO OPTIONS ARE

  • BELOW MEDIAN RATE AT 1.7.

  • RATE CUT, 25 BASIS POINTS 1.75

  • TO 2%.

  • THREE DISSENTS.

  • THE LAST TIME THAT HAPPENED IN

  • 2016, DECEMBER OF 2016.

  • CHARLES?

  • CHARLES: EDWARD REAL QUICK THEY

  • RAISED GDP TO 2%.

  • REPORTER: YES.

  • CHARLES: FROM WHERE?

  • >> 2.1%.

  • A SMALL INCREMENTAL INCREASE.

  • INTERESTING WE HAD DISSENT IN

  • DIFFERENT DIRECTIONS.

  • IT SHOWS A VERY DIVIDED FED.

  • LAST TIME THEY HAD DIFFERENT

  • DIRECTIONS IN DISSENTS

  • DECEMBER 2014 ONE GOING ONE WAY,

  • ONE GOING THE OTHER WHICH IS

2:30.

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