Aug 23, 2019

Jerome Powell: Trade wars weighing on economy, no word on cuts

Photo: Andrew Caballero-Reynolds/AFP/Getty Images

Fed Chair Jay Powell said in a closely watched speech Friday that the central bank is ready to support economic growth but "stopped short of signaling the start of a more aggressive easing campaign," the Wall Street Journal reports.

Why it matters: Worries of an economic downturn have increased in recent weeks, and Powell warned that "trade policy uncertainty" is a driving factor for the market's fears. President Trump has stepped up his calls for the Fed to do more to stimulate the economy — going so far as to tweet just minutes before Powell's speech — even though interest rates are already near historic lows.

Unsurprisingly, Trump took to Twitter again to slam Powell just after his speech ended, asking, "My only question is, who is our bigger enemy, Jay Powel [sic] or Chairman Xi?"

  • He added: "As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed. I will work 'brilliantly' with both, and the U.S. will do great."

Go deeper: China announces retaliatory tariffs on $75 billion of U.S. goods

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Federal Reserve announces 2nd consecutive rate cut

Fed chairman Jerome Powell. Photo: Mark Wilson via Getty Images

The Federal Reserve cut interest rates by a quarter point on Wednesday, bringing the target range for the benchmark Fed Funds rate to 1.75%–2%.

Why it matters: The Fed's 2nd consecutive rate cut reflects worries about the U.S. economy. The trade war and slowing growth around the world have made corporate executives more worried than they've been in years.

Go deeperArrowSep 18, 2019

The tweets of August

Illustration: Sarah Grillo/Axios

President Trump may not intend to launch the 2nd Cold War, but his tweets on Friday laid out one path to get there.

Why it matters: The president is using Twitter to demand a conscious uncoupling of the world's two largest economies.

Go deeperArrowAug 23, 2019

The escalation of the trade war may be too much for the Fed

Illustration: Lazaro Gamio/Axios

In his speech at Jackson Hole on Friday Fed Chair Jerome Powell effectively acknowledged that the world has reached the end of monetary policy as we know it.

What's happening: While central banks could rest assured they had the tools to rein in inflation and unemployment in the old days, that's now uncertain in this new world.

Go deeperArrowAug 26, 2019