Fed Pause is Back in Play

Interest rates may receive a reprieve from the Fed at its June meeting, according to a MarketWatch story running today. The committee now has to be concerned that economic growth could slow too much if the central bank pushes interest rates higher.

“The Fed should stop before it does more damage,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics. “This looks increasingly like spring 2000 all over again,” when the Fed stopped tightening in May as payroll growth weakened. The economy fell into a recession less than a year later anyway.

The May payrolls report adds to the evidence accumulating over the past few months that the economy is slowing just as the Fed had predicted. Housing, retail sales, consumer confidence, capital spending and auto sales have all weakened in recent months in the face of higher energy costs and higher interest rates.

You can read more about this story at Fed pause is back in play.