Rate Hikes on Hold as Fed Throttles Back
Chairman Jerome Powell confirmed the Federal Reserve is reconsidering two interest-rate hikes planned for 2019 due to a ‘less favorable outlook’ for the global economy.

Federal Reserve Chairman Jerome Powell announced a hold on planned interest-rate hikes in a press conference Wednesday.
WASHINGTON — Federal Reserve Chairman Jerome Powell said “the case for raising rates has weakened somewhat” in a press conference that followed the Fed’s first rate-setting meeting of 2019, confirming reports that two increases planned for this year would be suspended. He stressed that domestic economic indicators, including unemployment, remain strong.
“We believe we can best support the economy by being patient and evaluating the outlook before making any future adjustment to policy,” Powell told reporters, citing numerous, mostly global concerns, including U.S.-China trade tensions, the Brexit debacle, and a general economic slowdown in Europe and Asia.
Powell said the 35-day federal government shutdown will leave “some sort of imprint” on U.S. gross domestic product but won’t have a permanent effect. The Congressional Budget Office this week estimated the shutdown will result in a $3 billion loss.
Powell denied the Fed’s decision was swayed by overt pressure from President Donald Trump to cancel the hikes.
“My only motivation is to do the right thing for the economy and the American people. That’s it,” said Powell. “The situation calls for patience, I think it does. That stance of policy is appropriate. We see these uncertainties. We see a time where we have the luxury of being able to wait.”
The federal funds rate, which influences the cost of auto loans and other forms of consumer borrowing, remains at a range of 2.25% to 2.5% following seven incremental hikes since 2015. Jim Bianco of Bianco Research LLC told Bloomberg that Powell is “definitely listening to markets” and could be persuaded to reverse, rather than hold, course.
The Fed’s next adjustment “will probably be a cut at this point, probably later this year, like December or the first quarter of 2020,” Bianco said.
Originally posted on F&I and Showroom
More Industry

First-Half Dealership Deals Up
Buy-sell activity shows that acquirers are looking for value and scale as many retailers seek to leave an increasingly competitive and complex market, Kerrigan Advisors reports.
Read More →
Kia Closes Out Summer With a Bang
Its U.S. subsidiary broke multiple records in August, in part due to a surge of demand for hybrids models.
Read More →
Indiana Dealership Changes Hands
A 30-year-old Ford dealership in Indiana has a new owner and will soon be undergoing renovations to meet manufacturer requirements.
Read More →
Texas Dealership No Longer in the Family
The Ford store, a longtime cornerstone of the Houston market, is now part of one of the fastest-growing U.S. auto groups.
Read More →
Genesis Grows California Presence
The Cardinale Automotive Group opened its third Genesis rooftop in the Golden State, Genesis of San Bruno, a stand-alone dealership serving the San Francisco Bay Area.
Read More →
August Auto Sales a Mixed Bag
An early forecast shows strong business despite consumer hurdles, and hybrids are a big piece of their affordability coping strategy.
Read More →
EV Market Humming Along
July sales show steady growth as the segment stabilizes from last year’s artificial surge following pullback of federal support.
Read More →
Auto Loan Delinquency Rates Stabilize
Auto loans are a main driver of nonmortgage consumer debt, but delinquency rates stabilized in the second quarter across all credit risk tiers.
Read More →
EV Sales Recover in Q2
The EV sales roller coaster continues as numbers show improvement, but industry experts predict a year-over-year third-quarter decline and fourth-quarter jump.
Read More →
The Cheapest Hybrids to Fuel
The powertrain is increasing in popularity, in no small part due to its fuel economy. A new report lists the most efficient hybrids on the market.
Read More →