Federal Reserve Chairman Jerome Powell appeared in Congress Wednesday to begin two days of testimony to discuss potential fiscal policy changes and the state of the USA economy. "But we don't have a Fed that knows what they're doing".
In prepared testimony, Powell says that although the economy is doing "reasonably well", since last month, "it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the USA economic outlook". Policymakers have dimmed their outlook for the economy since last increasing interest rates in December, citing cooler global growth, below-target inflation levels and ongoing trade tensions.
At its meeting last month, the Fed's Open Market Committee voted to leave rates unchanged.
The Fed has kept its current benchmark overnight interest rate in a range of between 2.25% and 2.50% since December.
Powell has brushed off Trump's attacks, but in his testimony he noted that Congress has granted the central bank "an important degree of independence" to conduct policy "based on objective analysis and data".
At the moment, the economic landscape is a mixed one: The U.S. job market appears resilient but overall economic growth is slowing with many forecasters predicting growth has slowed to around 2 per cent in the just completed April-June quarter.
That change reflects two developments. President Donald Trump's trade wars have magnified uncertainties. Mr. Trump and Chinese President Xi Jinping declared a truce last month in what had threatened to become an escalating U.S.Читайте также: Angels' Mike Trout says Eagles are going to the Super Bowl
Traders reacted to Powell's semi-annual testimony by cementing bets on a rate cut at the Fed's next meeting July 30-31. They had implied a 25% probability of an aggressive cut before an upbeat U.S.jobs report on Friday.
Apparent progress on trade turned to greater uncertainty, and our contacts in business and agriculture report heightened concerns over trade developments. The Fed has raised rates nine times since 2015, four increases coming under Powell's leadership.
"We still think the odds favour a 25 bps "insurance" cut", said Kevin Cummins, a senior U.S. economist at NatWest Markets.
Federal Reserve Chairman Jerome Powell says that Facebook's new digital currency, Libra, "raises many serious concerns" and will be closely monitored by USA and overseas regulators.
President Trump has repeatedly argued that the US economy would be growing faster if the Fed lowered interest rates.
"I guess chairman Powell feels there is more downside risk to the economy and the Fed needs to accommodate that", said Kim Forrest, chief investment officer at Bokeh Capital Partners.При любом использовании материалов сайта и дочерних проектов, гиперссылка на обязательна.
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