For the second time since the recession, Federal Reserve Chair Jerome Powell announced an interest rate cut.
“We took this step to help keep the U.S. Economy strong in the face of some notable developments and to provide insurance against ongoing risks,” said Powell during Wednesday morning’s announcement.
Despite pressure from President Trump, who is fund raising in Southern California, to cut rates to zero or more, the rate was cut a quarter of a point.
Powell refused to respond to the president’s comments, “I’m not going to change my practice here today of not responding to comments or addressing comments made by elected officials,” adding the board would not make decisions based on politics.
The rate cut briefly sparked a sell off of stocks but then the market ended up.
Ryan Wilson, the senior vice president and financial advisor with RBC Wealth Management says he thinks this was an appropriate cut, “It is probably fuel for the stock market, there are some concerns about the global growth and that’s what the fed cited in this rate cut.”
He says it’s a good time to assess your portfolio, “The porridge isn’t all perfect right now, it’s a little mixed bag right now they need to make sure they have themselves set in the proper direction,” adding it’s a good time to look into refinancing any high interest rate loans that may be impacting your bottom line, “you should definitely be taking a look because rates are more favorably today than they were last year so it might make sense, it’s another look at your financial picture right the liability side of your balance sheets not just the investment side to make sure you’re managing that credit properly.”
He cautions those who rely on high interest rates for income like many retirees who may look to higher risk investments, “Don’t just try to go into the next best thing make sure you’re doing the things that are right for you, and unfortunately that is taking a little less interest but staying safe that might be the answer for them.”