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Fed Hasn’t Seen Enough Weakness to Cut Rates

John Carney, economics editor at Breitbart News, said on Fox Business Network’s “Kudlow” show on Tuesday that a few months of economic weakness won’t be enough for the Federal Reserve to cut interest rates.

“John Carney, it looks like we’re starting to see an economic downturn. What are your thoughts on that?” host Larry Kudlow asked.

“It’s probably an exaggeration to say that GDP is now down 57 percent. Economic data isn’t going to change that much in three weeks, so I would be a little cautious about overinterpreting this decline, but I do think there are signs that the economy is weakening,” Carney said.

Carney said, “The Fed is not going to cut rates. A month or two of weakness is not enough to cut rates. Some people say they’ll cut in July or September, but I don’t think they’re going to cut in July. A cut in September would be a political firestorm. And Larry, there are some indications that April was very weak, but I would say May may have recovered a little bit. If you look at the jobless claims numbers, the S&P Global PMI, things like that, you can see that April was bad, but May may not be as bad. So, the GDP numbers right now are about the same as the April numbers that just came out in May. So, we may actually see a little bit of recovery.”

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