Fed ready to act amid uncertainties weighing on economy, Jerome Powell says

Business | 10 Jul 2019 8:31 pm

Federal Reserve Chairman Jerome Powell said today that the U.S economy is suffering from a bout of uncertainty caused by trade tension and slower global growth and he pledged again that the central bank would act as needed to support demand.

“Since [the Fed meeting in mid-June], based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said in prepared remarks for Congress, MarketWatch reports.

He stuck to the message delivered after the Fed's June meeting that uncertainty over trade and the health of the global economy were “crosscurrents” boosting uncertainty.

The Fed chairman said that GDP growth appears to have slowed in the second quarter from the 3.1 percent annual growth rate in the first quarter, led by a notable slowdown in business investment.

“These concerns may have contributed to the drop in business confidence in some recent surveys and may have started to show through to incoming data,” he said.

The Fed would closely monitor developments “and would act as appropriate to sustain the expansion,” Powell said, repeating a pledge made in June.

The Fed chairman’s comments, in testimony prepared for delivery later Wednesday morning to the House Financial Services Committee, made no mention of the strong payroll growth in June, or the U.S.-China trade truce reached in late June at the G-20 meeting of top finance officials. Some economists have argued that these developments over the past few weeks showed the U.S. economy was on a firmer path than the Fed believed in mid-June.

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