Uncertainty about trade frictions and global growth continues to weigh on the US economic outlook, Federal Reserve Chair Jerome Powell said Wednesday, keeping the door open to an interest rate cut this month.
In his highly-anticipated testimony to Congress, Powell said many central bankers believed the case for lower rates “had strengthened” last month given the rising “crosscurrents” in the economy.
President Donald Trump has been putting intense and constant pressure on the Fed to cut the benchmark interest rate to boost the economy, repeatedly criticizing Powell on Twitter and in public comments.
Financial markets too were looking for a clear signal about whether the central bank will cut lending rates later this month, and after a blowout US jobs report on Friday investors became concerned the Fed might make them wait.
Powell was not explicit, but in his prepared statement to the House Financial Services Committee he noted that the Fed in June announced it “would act as appropriate to sustain the expansion.”
After raising the key borrowing rate nine times since 2015 as the economy expanded, most recently in December, the Fed last month opened the door to a rate cut amid signs of slowing.
And Powell said that in the weeks since the June policy meeting “it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the US economic outlook.”
At the same time, price measures watched closely by the Fed continue to run well below its two percent target.
– ‘Objective analysis’ –
“Inflation pressures remain muted,” he said. “And there is a risk that weak inflation will be even more persistent than we currently anticipate.”
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.”
In the wake of Trump’s aggressive trade policies, especially with China, Powell said businesses and farmers “report heightened concerns” about the US economy.
Meanwhile, disappointing growth in China and Europe raised fears a weak global economy could impact US growth, which contributed to slowing business investment and waning confidence, he said.
Although the US economy expanded by a solid 3.1 percent in the first three months of the year, the Fed chief said that growth was based on factors, like exports, “that are not generally reliable indicators of ongoing momentum.”
The Fed still believes the US economy will post solid growth, as labor markets remain healthy, but Powell pointed to other domestic concerns that need to be addressed, including “high and rising federal debt.”
In addition, he said, “The relative stagnation of middle and lower incomes and low levels of upward mobility for lower-income families are also ongoing concerns.”
The Fed chief is required to testify before Congress twice a year, and Powell will respond to questions from legislators, before appearing Thursday before the Senate Banking Committee.
Internet slams ‘disgusting’ Donald Trump Jr. after he skates for killing endangered Mongolian sheep
According to new reports, Donald Trump Jr. illegally shot and killed an endangered argali sheep on a taxpayer-funded hunting trip in Western Mongolia in August — and the Mongolian government retroactively gave him a permit rather than tread on the toes of the U.S. government.
The report was met with outrage on social media, with commenters blasting Trump Jr.'s bloodthirst for endangered animals and the wealth and privilege that allowed him to kill them with no accountability. Some even compared it to the right-wing outrage about Hunter Biden being given a free position on the board of Ukrainian energy company Burisma.
Roman Polanski blames Harvey Weinstein for rape accusation and says media ‘making me a monster’
Film director Roman Polanski has spoken out for the first time since another woman accused him of rape, declaring that the media are "trying to make me into a monster".
And in an extraordinary twist he blamed Harvey Weinstein for his woes, in an interview with Paris Match magazine published Wednesday.
He claimed the disgraced Hollywood mogul tried to brand him a "child rapist" to stop him winning an Oscar in 2003 for "The Pianist".
Polanski -- a fugitive from US justice since 1978 after he admitted the statutory rape of a 13-year-old girl -- also dismissed the latest rape allegations against him as "absurd".
‘This is a lie’: Lisa Page pummels Trump for telling blatant falsehoods about her at crazed rally
Former FBI attorney Lisa Page on Wednesday called out President Donald Trump for once again lying about her at one of his political rallies.
On Tuesday night, Trump told supporters in Pennsylvania that Page supposedly had to file a restraining order against former FBI agent Peter Strzok, with whom she'd had a relationship during the 2016 presidential campaign.
Trump hedged his claim by telling his supporters, "That's what I heard, I don't know if it's true."
Page, however, took to Twitter to shred the president for repeating a blatant falsehood.
"This is a lie," she wrote. "Nothing like this ever happened. I wish we had a president who knew how to act like one."