Federal Reserve Chair Jerome Powell stressed Friday that the central bank will act to ensure the US economic expansion continues, even in the face of “significant risks” posed by slowing global growth.
But as Beijing stepped up retaliation in the US-China trade war, Powell warned that trade tensions are exacerbating the global slowdown and the Fed doesn’t have a “rulebook” for dealing with the uncertainties.
Powell at the same time played down concerns that further stimulus could spark a surge in inflation, saying, “Low inflation seems to be the problem of this era, not high inflation.”
President Donald Trump’s trade war with China has escalated for months, undercutting business confidence and curtailing investment, while causing wild swings on global stock markets.
The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly due to the anticipated impact of trade uncertainties on the growth.
But in his hotly-anticipated speech, Powell made clear the central bank has limited tools to respond to a trade war.
“The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China,” he said in a speech prepared for delivery to an annual central banking conference in Jackson Hole, Wyoming.
“The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Powell said.
The US economy “is now in a favorable place,” but given the “significant risks we have been monitoring,” the Fed “will act as appropriate to sustain the expansion,” he said.
He warned, however, that there is no “settled rulebook for international trade … no recent precedents to guide any policy response to the current situation.”
Several Fed officials at the conference repeated their opposition to further rate cuts to boost the economy, in part due to the potential to spark an upsurge in prices.
But Powell said, “Low inflation seems to be the problem of this era, not high inflation.”
And he said, “in the unlikely event that signs of too-high inflation return, we have proven tools to address such a situation.”
Trump impeachment trial: 4 stories from first day spell doom for Mitch McConnell
If the score was kept for the first day of the impeachment trial, it would show hefty losses for Senate Majority Leader Mitch McConnell.
As Former Special Counsel for the Department of Defense, Ryan Goodman, pointed out, four major headlines perfectly reflect the cracks in the strangle-hold McConnell has had on his party.
First, McConnell was forced to change the impeachment hearing rules. After a huge uprising by Americans demanding to be able to watch the impeachment trial during normal human hours, senators told McConnell he'd lost the votes to hold proceedings after midnight.
‘Disease fanboy’: Internet slams NBC conservative for ‘rooting for pandemic’ to distract from Trump impeachment trial
Hugh Hewitt is once again under fire, this time for almost appearing to be glad a deadly SARS-related virus has been diagnosed in a patient in Washington state – saying additional diagnoses will take the focus away from the Senate's historic impeachment trial. Hewitt is a conservative Washington Post columnist, radio host, MSNBC and NBC contributor, and law professor who went from being a "Never-Trumper" to all-in for President Donald Trump.
"People care much more for their health than theater," said Hewitt via Twitter, referring to Trump's impeachment trial. The SARS-related virus, known as the Wuhan coronavirus, is named for an area of China where it was first found. It "has infected more than 300 people and killed six in an outbreak that has struck China, Thailand, South Korea, Japan and now the US," CNN reports.
Greece elects first woman president
Greece's parliament on Wednesday elected the first woman president in the country's history, a senior judge with an expertise in environmental and constitutional law.
A cross-party majority of 261 MPs voted in favour of 63-year-old Ekaterini Sakellaropoulou, parliament chief Costas Tassoulas said.
"Ekaterini Sakellaropoulou has been elected president of the republic," Tassoulas said.The new president, until now the head of Greece's top administrative court, the Council of State, will take her oath of office on March 13, he added.
The daughter of a Supreme Court judge, Sakellaropoulou completed postgraduate studies at Paris's Sorbonne university.