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		</div><p>The European Central Bank (ECB) met July 25th, signaling more easing measures ahead in this slowing market. The central bank said it aims to maintain rates &#8220;at their present or lower levels&#8221;, foreshadowing a possible rate cut on the horizon.</p>
<p>ECB President Mario Draghi said that <em>&#8220;a significant degree of monetary stimulus continues to be necessary to ensure that financial conditions remain very favorable and support the euro area expansion.&#8221;</em></p>
<p>The ECB said it was considering economic stimulation options, <em>&#8220;such as the design of a tiered system for reserve remuneration, and options for the size and compensation of potential net asset purchases.&#8221;</em> In other words, banks will be charged lower fees for holding reserves at the ECB,</p>
<p>Draghi also mentioned that the risk of a recession in the region was low. The euro appreciated to $1.1153 after this message was delivered.</p>
<p>Euro stocks rose after the ECB met, with the pan-European Stoxx 600 closed .4% higher</p>
<h3><strong>The Fed in the hot seat</strong></h3>
<p>Investors are predicting with 80% certainty the Federal Reserve will announce a rate cut after its meet July 31st. The messages received from Federal Reserve Chairman, Jerome Powell as he spoke to congress, continued the &#8216;dovish&#8217; narrative the Fed has regarding its monetary policy.</p>
<p>When speaking to congress, Powell informed the house that the Fed will do whatever is &#8220;appropriate&#8221; to sustain the economic expansion.</p>
<p>He later expressed his concern for the global economy and slowed growth. <em>&#8220;Growth indicators from around the world have disappointed on net, raising concerns that weakness in the global economy will continue to affect the U.S. economy.&#8221;</em></p>
<h3><strong>Will the consensus get it right?</strong></h3>
<p>The market is pricing for a rate cut and the S&;P 500 is reaching higher highs. With the current data available. some investors think the rate cut is for &#8216;insurance&#8217; to avoid economic downturn.</p>
<p>Michael Reynolds, investment officer at Glenmede, said, <em>&#8220;The Fed is trying to be proactive.&#8221;</em></p>
<p><em>&#8220;The way we view an insurance rate cut is, it&#8217;s a proactive move to protect against what seems to be potential but unpredictable risks.&#8221;</em></p>
<p>An insurance cut is a way of easing when the Fed sees no risk of inflation and the economy is still in good shape. Business can still flow, but with a bit of ease.</p>
<p>The one question investors can&#8217;t find the answer to is how the rate cute will impact the economy. What we already know is that banks can borrow at a cheaper rate. Although, if the Fed has to act in an recession, they limit the room they have to work with for lowering interest rates.</p>
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