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Three Federal Reserve Members to Speak Friday - What to Listen For

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The Federal Reserve lowered interest rates and is deciding on whether there will be another cut come the end of 2019. 

But several Fed members have recently vouched for a no-cut post the September cut. Now, those members are set to speak. 

New York Fed President John Williams, Boston Fed President Eric Rosengren and Dallas Fed President Robert Kaplan will all speak. Investors will be listening out for signs of less dovishness. As the Fed has recently turned slightly less willing to cut interest rates for a third time in 2019, it will be at least interesting to see where these members stand. 

Fed chairman Jerome Powell has indicated in his comments he is closer to the rate-cutting camp, but has deferred to his colleagues on the possibility of not cutting rates anymore in 2019, by speaking about maintaining low rates rather than explicitly speaking about cutting them from here. 

Since the middle to end of 2018, U.S. GDP growth has decelerated from 4% to around 2%. Inflation has remained at roughly 2%. Unemployment, though, has remained strong at 3.7%, enabling the consumer to be strong for the moment. The trade war, while potentially taking a turn for the better, is still a glaring 'x' factor. Many are concerned the reduced capital expenditures from companies uncertain about the future of trade will reduce hiring enough that  the strong consumer will become weak. The consumer comprises roughly 70% of the country's economic output. 

The case for lower rates is clear. But a strong jobs report out Thursday and recently positive GDP and inflation points have helped to lower the probability of a third interest rate cut in 2019 to 55%, down from above 80% a week ago. 

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