The Federal Reserve took some bows last week in the relatively safe halls of the Democratically controlled Congressional House of Representatives, where President Donald Trump’s tweeting thunderbolts have no sway.

In two separate appearances before House committees, Fed chairman Jerome Powell made clear that the Federal Open Market Committee (FOMC) was going to stand pat after three rate reductions this year to the Fed funds rate. Done and done. Effectively, Powell said that current interest-rate policy is in the right place. But, hey, the Fed continues to be data dependent.

Well that’s fine, but let’s see what happens if the market corrects. That’s not our house view but the Fed has been a bull market enabler for years now, though not a particularly consistent one, as we saw last winter.

Specifically, Powell said the Fed is optimistic that the interest-rate cuts this year would help support the economy against headwinds, such as an economic slowdown outside the U.S. and lingering trade uncertainty from the U.S.-China trade spat of the past few months. He noted the Fed views the current policy stance as appropriate as long as the U.S. economy grows moderately and the labor market remains strong.

When asked about rates next year, Powell repeated the central ba...

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