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Fed Signals Rate Cut but Warns on Trade Wars
Federal Reserve Chairman Jerome Powell implies that the central bank will cut interest rates next month but says uncertain trade policies make decisions tougher.
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Federal Reserve Chairman Jerome Powell implies that the central bank will, as many analysts expect, cut interest rates next month. But he says uncertain trade policies make decisions tougher.
Powell asserts that Fed monetary policy has been tailored to be effective in supporting public confidence, consumer spending and business investment. Fitting uncertain trade policy into that framework “is a new challenge,” he adds.
Powell steers clear of blaming the Trump administration trade policies for concern among economists about the cooling global economy. He notes such other contributing factors as civil strife in Hong Kong and the U.K.’s impending exit from the European Union.
But Powell does note that trade wars sap the desire for business to invest, thereby creating risk for the American economy.
Members of the Fed were split last month about the bank’s decision to lower prime interest rates by one-quarter point to a range of 2.0%-2.25%. They have increasingly hinted that Fed monetary policy is not responsible for creating economic turmoil within the U.S., the Journal says.
An unimpressed President Donald Trump groused in a tweet earlier today that, “As usual, the Fed did NOTHING!”
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