It was couched in Fed language, but Chicago Fed President Charles Evans’ message was still clear. Things look pretty dark on the economic horizon.
During an event in Chicago, Evans said:
“I think the downside risks are stronger than the upside risks and that’s a good rationale for why we recalibrated monetary policy from slightly restrictive to slightly accommodative.”
To be fair, even when describing the central bank’s “recalibration,” Evans remained optimistic about the U.S. economy, and said he’s going into the Fed’s meeting at the end of the month “extremely open-minded.”
Evans has supported the central bank’s decision to lower borrowing costs this year. The Fed cut interest rates in July and at its subsequent September meeting to offset headwinds to the U.S. economy from slowing global growth and the Trump administration’s trade war with China, which has hurt U.S. manufacturing and cooled business investment.
For individuals, all of this means the same thing: There will be no earnings on your savings. It looks like we stand a better chance of 10-year Treasury yields dropping under 1% than going over 3%.
Now would be a great time for young people to buy homes, if they could scrape up the downpayments.