Federal Reserve chairman Jerome Powell said Friday that the central bank is poised to act to extend the decade-long U.S. economic expansion, now the third longest in the nation’s history.
“Our economy is now in a favorable place,” Powell said, before warning that “we have seen further evidence of a global slowdown, notably in Germany and China” spurred by developments such as U.S. tariffs on Chinese exports, a potential no-deal Brexit, and political unrest in Hong Kong.
“Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion,” Powell told the central bank’s annual conference in Jackson Hole, Wyo. “It will at times be appropriate for us to tilt policy one way or the other because of prominent risks.”
“The U.S. economy has continued to perform well overall, driven by consumer spending” in the face of recent challenges, Powell said.
Meanwhile, stocks plummeted Friday after President Trump lambasted the Powell in a pair of tweets, complaining that the fed had not further slashed interest rates.
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
Last month, the Federal Open Market Committee cut its benchmark interest rate a quarter-point to 2.25 percent despite noting “moderate” growth and a “strong” labor market.
“Fitting trade policy uncertainty into this framework is a new challenge,” Powell said, referring to Trump’s heavy tariffs on China and other countries. “While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rule book for international trade.”