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Fed Chairman Jerome Powell Jackson Speech: No Trade Rules



Federal Reserve Chairman Jerome Powell reiterated his promise on Friday to continue the economic expansion, acknowledging that tariffs and other factors are holding back growth. Less than an hour after the speech, President Donald Trump blasted Powell on Twitter, referring to him as "our enemy."

Powell, while not specifically stating where he thinks the percentages should go, has promised that the Fed will "act as appropriate to sustain the expansion," a phrase he has used several times in the recent past.

Powell also said in his annual remarks at the Jackson Hole Symposium of the Central Bank that "the economy is close to two goals" from the Fed's dual mandate for full employment and price stability.

"Our challenge now is to do what monetary policy can do to support enlargement so that the benefits of a strong job market extend to more than others and focus inflation around 2 percent. "

also outlined the challenges facing the Fed and stated that he and his colleagues" have no recent precedents to guide any political response to the current situation. "

" While monetary policy is a powerful tool, working in support of consumer spending, business investment and public confidence, this cannot provide a well-established rule for international trade, "he said in prepared remarks." However, we can try to look at what may be a passing event, we focus on how trade developments affect prospects and tailor policies to promote our goals. "

He said the Fed was looking for ways to tackle development. into a landscape that has changed significantly since the start of enlargement a decade ago.

"We are looking at monetary policy instruments that we have used both in quiet times and in times of crisis. We are wondering whether to expand our instruments," he said.

On a broader level, Powell paints a predominantly positive picture of the US economy, stating that it has "continued to perform as a whole" while facing challenges.

"Global growth prospects have been worsening since the middle of last year. Trade-insecurity seems to play a role in global slowdown and in weak manufacturing and capital costs in the United States," he said.

In July At the 30-31

meeting, the Federal Open Market Committee approved a policy of reducing 25 basis points, the first reduction in 11 years. Officials have raised concerns about slower global growth, tensions between the US and China and lower inflation as the decline comes.

Markets expect the Federal Council to approve another abbreviation of its meeting in September and another before the end of the year.

in his discussion on Friday, Powell broke Fed's policy in three epochs: one that continued from 1950-82 when he saw the Fed use a stop-and-go policy that promoted faster growth, but it eventually ended with running inflation; 1983-2009, in which the Fed controls inflation but oversees financial surpluses that ended in the Great Recession; and the current era in which policymakers are facing a world of slower growth with lower than normal interest rates and unemployment.

"We have not seen unsustainable loans, financial buoys or other such excesses occurring at times during the Great Moderation. I continue to weigh the overall risks to financial stability to moderate. But we remain vigilant," he says. [19659002] "As the most important effects of monetary policy are felt with uncertain lags of a year or more, the Committee should try to consider what may happen and focus on things that are likely to affect the prospect over time. or that pose a material risk, "he added." But putting trade policy uncertainty in this frame is a new challenge. Setting up trade policy is a matter for Congress and the administration, not the Fed. "

Powell did not mention the inversion of the yield curve that shook the markets. for the last 50 years.Minutes since the last meeting also offer only a passing reference to widening the curve and Powell does not mention a recession in his speech. [19659019]
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