Powell Signals Fed Will Cut Rates, Support U.S. Economy Against Damage from Trade War

Breitbart | 7/10/2019 | John Carney
sally140353 (Posted by) Level 3
Click For Photo: https://media.breitbart.com/media/2018/12/Trump-Powell.png

President Trump has a new, if reluctant, ally in the trade war with China: the Federal Reserve.

Federal Reserve Chairman Jerome Powell said on Wednesday that it was appropriate for the Fed to cut rates if concerns about trade and tariffs were slowing the economy.

Testimony - House - Financial - Services - Committee

In his testimony to the House Financial Services committee, Powell strongly signaled that the Fed would likely lower interest rates in the months ahead in part because trade disputes and a slowing global economy have created clouds of “uncertainty” that are weighing on the U.S. economy.

“Economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy. Moreover, a number of government policy issues have yet to be resolved, including trade developments, the federal debt ceiling, and Brexit,” Powell said.

Economists - Wall - Street - Fed - Rates

There have been some economists on Wall Street and elsewhere who have urged the Fed to resist cutting rates, arguing that this would only “enable” what they view as the Trump administration’s belligerence on Trade. But as clearly demonstrated by Powell’s testimony Wednesday, the Fed is not joining the #resistance.

Many Fed officials undoubtedly believe that Trump’s tariffs disputes are counter-productive or too heavy-handed when it comes to resolving trade disputes with China and other nations. But the Fed does not have a role in setting trade policy, which is the responsibility of Congress and the president. So it is left in a reactive stance, forced by its legal mandate to adopt policies that promote growth and price stability even when the elected branches take courses it finds unwise.

Problem

This is hardly a new problem for...
(Excerpt) Read more at: Breitbart
Wake Up To Breaking News!
Sign In or Register to comment.

Welcome to Long Room!

Where The World Finds Its News!