Jerome Powell may be getting ready to pause this year’s monetary easing campaign.

The Federal Reserve chairman and his colleagues are expected to cut interest rates a quarter point on Wednesday for a third straight meeting, to provide insurance against global risks, while signaling that the committee has probably done enough for now. The decision will be announced at 2 p.m. in Washington with Powell facing reporters 30 minutes later.

Investors are fully pricing a cut, with the odds increasing to 97% after Commerce Department data showed gross domestic product increasing at a better than expected 1.9% annualized pace in the third quarter, as resilience from U.S. consumers offset weakening business investment and faltering export markets.

Economists surveyed by Bloomberg put the odds of a cut at 75%, betraying a bit more doubt that reflects divisions on the committee about the need to lower borrowing costs much further. While policy makers all see risks from trade uncertainty and weakness abroad, some view the Fed’s reductions in July and September as already sufficient to offset those headwinds absent additional shocks.

Greenspan Approach
Powell will likely use his press conference to communicate that message of a pause while emphasizing flexibility if the economic outlook shifts significantly.

“What they want to provide is a hawkish cut,’’ said Carl Tannenbaum, chief economist with Northern Trust Co. in Chicago and a former Fed researcher. “Expressing that properly will require some deft expression, which the Fed hasn’t always been able to provide.’’

Powell is following the playbook of a mentor, Alan Greenspan, who cut rates three times in midcycle adjustments in 1995-1996 and in 1998 to counter risks. September forecasts showed the FOMC saw interest rates hitting bottom this year before rising slightly in 2021.

Investors are slightly more dovish and have fully priced in another quarter point cut by mid-2020. The Fed will update its quarterly forecasts in December.

The FOMC is divided between policy makers who favor insurance against risks from a manufacturing slump, the trade war with China, Brexit and slower global growth, versus those who see domestic data largely supporting their outlook for solid growth.

Likely Dissents
The latter camp includes Kansas City Fed’s Esther George and Boston’s Eric Rosengren, both likely to dissent again if the Fed cuts rates on Wednesday. They have some company: The Fed’s September dot plot of interest rate projections showed five officials didn’t favor the cut delivered at that meeting and another five who saw no need for another cut this year.

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