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US Fed ‘grappling’ with need for rate cut: Jerome Powell

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America’s grinding trade wars are darkening the economic horizon and could justify a decrease in interest rates, Federal Reserve Chairman Jerome Powell said Tuesday.

But Powell also insisted the central bank was “insulated” from political pressures despite President Donald Trump’s persistent criticism of the Fed chairman.

Powell’s speech in New York amplified the central bank’s recent message that policymakers are ready to step in to protect the world’s largest economy, which next week will mark its longest expansion on record but is showing increasing signs of strain.

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Markets overwhelmingly expect the Fed to cut rates next month as Trump’s trade battles drag on and the global economy slows — both factors that have begun to dent business confidence and investment in the United States.

But Powell was careful to temper this message, warning that the central bank would not “overreact” to individual data points and short-term swings in sentiment that could quickly evaporate.

“The question my colleagues and I are grappling with is whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation,” Powell said in prepared remarks.

Trump has repeatedly — and publicly — demanded looser monetary policy, even though the Fed is meant to be above the political fray.

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The Fed last week held steady on interest rates for the fourth time this year. And with US unemployment near historic lows and inflation forecast to rise only slowly, the outlook remained generally “favorable,” Powell said.

But risks to that outlook have grown, he added, as recent progress on resolving trade disputes had deteriorated, producing greater uncertainty.

Powell said business people have voiced “heightened concern” over trade, which may have hit confidence and could also be turning up in economic data, such as weakening investment by companies.

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But he cautioned that current economic warning signs could prove temporary and the US central bank should seek confirmation before taking any policy action.

“It’s important not to overreact in the short term to things which may turn out to be temporary,” he said.

Nevertheless, he said “many” members of the Fed’s rate-setting Federal Open Market Committee believe the case for cutting rates had “strengthened.”

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“A lot has changed since December, including estimates of global growth for 2019 have come down substantially,” he said during a Q&A following the speech.

He pointed in particular to the near-collapse of US-China trade talks last month.

“My colleagues and I still see a favorable outlook as the most likely outlook,” he said.

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“But we do see that the risks to that outlook have increased. We’re very mindful of those risks and prepared to use our policy tools to support activity as needed.”


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‘This is INSANE’: National security experts shocked by Pompeo’s saber-rattling towards Turkey

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National security experts are floored seeing the warmongering coming from Secretary of State Mike Pompeo, who said Monday that he was prepared to go to war with Turkey.

“We prefer peace to war,” Pompeo told CNBC. “But in the event that kinetic action or military action is needed, you should know that President Trump is fully prepared to undertake that action.”

He didn't want to give specifics, however, saying he wanted to let the president announce things himself.

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The tangled web of Rudy Giuliani’s associations with questionable characters in the Ukraine scandal

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Washington Post political analyst Philip Bump has created a link analysis of the tangled web President Donald Trump's attorney Rudy Giuliani finds himself caught in.

According to the report, Giuliani isn't only linked to Lev Parnas and Igor Fruman, the two associates indicted and arrested after lunch with them a few weeks ago. Giuliani is linked to a chorus of people now outed for being involved in the Ukraine scandal.

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WATCH: CNN displays the Constitution’s Emoluments Clause as Trump rambles about it being ‘phony’

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Two days after intense pressure forced President Donald Trump to back down from his plan to host the 2020 G7 summit at his resort in Doral, Florida, the president dismissed the Constitution's anti-corruption clause—which his plan would have violated—as "phony."

"You people, with this phony Emoluments Clause," Trump told reporters at a White House press conference on Monday, responding to allegations that hosting the meeting of foreign leaders at his own property would be a conflict of interest.

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