Thread by @RickRieder

As expected, the #FOMC cut policy rates a quarter-point, Chair #Powell referenced the Committee’s reliance on data dependency and provided a nuanced view of #economic conditions. Still, just because all that was “expected,” doesn’t take away from the fact it was also good policy.

Indeed, today’s announcement represents an important moment for the #Fed, in which policy rates were moved to appropriate levels, alongside significant liquidity provision, which is precisely the right combination in our view: this is a big positive for #markets.

Specifically, we think the #Fed moved to the lower end of what we believe should be the equilibrium rate of interest in an #economy that’s facing aging demographic trends, and which benefits from still positive interest rates.

Vitally important is the fact that Fed #policy will not cut #rates into the unproductive arena of negative rates.

Finally, the world doesn’t need any more negative, or close-to-negative, rate levels, it needs #liquidity and a more contained U.S. #dollar, and the #Fed’s recent moves position the Committee nicely to help deliver this to the extent it’s able to.