WASHINGTON (Reuters) - Friday’s booming U.S. jobs report should give the Federal Reserve all it needs to stick to its plan not to cut interest rates further in the near future, so when U.S. central bankers meet this week, most of the focus will be on their outlook for next year and beyond.
But here’s the rub: They often get it wrong. The coming year - with the added complications of an ongoing trade war and the U.S. presidential election - looks to be no exception.
Alongside their interest-rate decision, Fed policymakers offer up economic and rate projections at every other meeting, and the next iteration of their so-called “dot plot” is due at the end of the two-day policy meeting on Wednesday.
The Fed has made clear that it plans to stand pat on rates barring a “material” change in the U.S. economic outlook. Policymakers will assess how the three interest rate cuts they’ve implemented this year, most recently at the last meeting in October, filter through the economy over the coming months.
Those cuts were characterized as a pre-emptive mini-boost to the world’s largest economy to mitigate the effects of slowing global growth and a 17-month-long U.S.-China trade war. The Fed hoped to offset fears that a recession in manufacturing and a drop in business investment could spread malaise to the wider economy.
So far the interest rate cuts seem to be working. The Labor Department on Friday reported U.S. job growth increased by the most in 10 months in November and recent data on housing and orders for big-ticket goods have offered a fairly upbeat
