Weekly Market Update
FED HOLDS RATES STEADY AND ADOPTS "PATIENT" STANCE
Thursday, January 31, 2019
On Wednesday, the Federal Reserve indicated its intent to hold interest rates between 2.25% and 2.5% and signaled that it may not raise them anytime soon, contradicting earlier indications of continued rising rates in 2019. Federal Reserve Chairman Jerome Powell said the case for higher interest rates has weakened in response to muted inflation and somewhat slower U.S. growth, stressing that the central bank will exercise patience before determining its next move. The Fed also announced that it would slow or potentially reverse the drawdown of its bond portfolio, a shift from its December commitment to winnow Treasuries and mortgage bonds. Some Fed officials think that the new approach may improve its ability to influence economic conditions. Prior to the 2007–2008 financial crisis, the Fed's actions focused primarily on adjusting the fed funds rate and the banking system's overall reserves.
In Other News
- The U.S. government routinely produces a wide range of economic data and indicators, and the partial federal shutdown delayed the flow of economic data, even after President Trump agreed to reopen the federal government for three weeks while negotiations continued.
- Virginia has opened an office dedicated to helping residents with student loan debt. The Office of the Qualified Education Loan Ombudsman was established by legislation passed during the 2018 General Assembly session. Scott Kemp, who has spent 10 years in various roles within Virginia's Community Colleges system, is the office's first Student Loan Advocate.
- Faculty leaders at the University of Illinois at Urbana-Champaign are weighing a proposal to protect faculty members from students who enroll in their classes solely to disrupt or troll educators. Jay Rosenstein, a professor of media and cinema studies there, is a vocal opponent of Native American mascots and has clashed with some on campus who continue to dress as Illinois' former mascot, Chief Illiniwek, at sporting events.
- In an ongoing effort to keep college costs down and attract more Illinois students, the University of Illinois is proposing a fifth-straight tuition freeze for in-state freshmen next fall, though fees and housing rates will inch up slightly.
- Universities and colleges throughout the Midwest were among those to announce classes will be canceled due to extreme cold temperatures.