The Fed Started to Ease. Did You Miss It?

Some have been waiting for the Fed to lower interest rates and confirm it will ease monetary policy, which may result in lower home mortgage rates, credit card rates, auto loans, and so forth.

However, the Fed went another route at the close of its two-day meeting on May 1. They took an indirect approach to easing, and if you weren’t following closely, you may have missed it.

Chairman Powell will reduce the cap on maturing Treasury securities, meaning the current rate of $60 billion will now be $25 billion. To some, that indicates that the Fed is committed to lowering short-term interest rates later this year. To others, it suggests the Fed wants to keep the system operating smoothly and take some financial pressure off mid-sized banks. But to almost every economist, it’s a signal that the Fed is moving toward easing and away from tightening.