Despite a market selloff over the past few days, the fear that had increased recently as investors awaited two days of Fed Chair Jerome Powell’s testimony to Congress that commenced last Wednesday evaporated rapidly, with the markets jumping to fresh highs as Powell supported the argument for easing monetary policy.

In written testimony to the House Financial Services Committee, Powell claimed that business investments throughout the U.S. have languished “notably” recently as uncertainties over the economic outlook persist.

“Crosscurrents have reemerged,” Powell said. “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”

However, is a Fed rate cut truly in the cards, and does it make sense right now?

“It just doesn’t smell right given the strength of the economic data,” said Chis Rupkey, chief financial economist at MUFG Union Bank. “The consumer is back in a big way. You really have to ask yourself why they are going to cut rates.”

“This really takes the cake in terms of just how strong the consumer is,” Rupkey said. “The Fed has their story and they’re sticking to it. So despite the data, despite the strong jobs numbers, they believe this is an insurance cut. A risk management cut is necessary for two factors: one is the slowing global economy, and No. 2 is the fact that inflation has been below the 2% target for so long. Given those two factors, I expect them to go. If not, you’re going to hear a whole lot of ruckus out of the White House.”

Still, there is a lot of interpretation when it comes to how investors decide how to weigh Fed speak in terms of market making decisions. Powell’s indication that he is ready to “act as appropriate to sustain the expansion,” a phrase seen in the markets as code for an impending rate cut.

Powell has said that the slowing global economy and the ongoing trade battle between the U.S. and China, as well  as the debt ceiling negotiations in Congress, a potentially messy Brexit, and the Fed’s struggle to bring inflation up to the 2% target level could all rationalize a rate cut.

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