22 July 2019 FT — Articles to Read

22 July 2019


Question: According to MSN: Money, what are five (5) money milestones to hit by age 40?


Fed poised to lower rates for first time in a decade with cut of 25bp – Pg. 1

  • The Federal Reserve is set to cut interest rates by 25bps at its policy meeting this month, as the US central bank settles on a cautious approach to monetary easing despite political pressure for deeper stimulus
  • Markets are pricing in fresh easing measures from the ECB – including possible rate cuts – as soon as this week, while the BoE has recently taken a move dovish tone


Powell seeks a cure for the ‘disease’ of low inflation – Pg. 3

  • Mr Powell and other Fed officials have justified the need for looser monetary policy by citing “uncertainties” in the outlook due to trade tensions and a weaker global economy. But the persistence of low inflation in the US economy, despite high growth and plentiful jobs, is dominating factor behind the probable decision to cut rates by 25bps
  • The Fed’s preferred measure of inflation – the core PCE price index, which excludes food and energy – is running at 1.7% year-on-year compared with its target of 2%. Inflation expectations have also weakened
  • One danger for the Fed is that an interest-rate cut fails to have the desired effect of stoking inflation, leading it to burn through monetary policy space without any real results to show for it
  • …some basic economic mantras have fallen by the wayside, including the notion embedded in the so-called “Phillips Curve” that plentiful employment would lead to higher prices


US banks lifted by rise in credit card spending – Pg. 8

  • US shoppers increased their credit card spending in the second quarter, giving a welcome boost to card issuers and adding to the debate about the financial health of consumers
  • Amex is the second-largest card issuer by purchase volume, ….which reported an acceleration in spending growth from 10% in the first quarter to 11% in the second
  • The number of accounts overdue by more than 30 days rose slightly in the second quarter at both Amex and Capital One


Answer: (1) Have a solid emergency fund; (2) Pay off your credit card debt; (3) Start building retirement savings; (4) Buy life insurance; (5) Make out a Will