Federal Reserve chairman Jerome Powell on Friday said the U.S. central bank is prepared to take action in the event of a global economic downturn. Powell, however, was tightlipped on whether the Fed would initiate another quarter-point interest rate cut as many investors had hoped.
Global trade disputes, Powell stressed, like the one President Trump is waging against China, pose a "new challenge" for the Fed.
"While monetary policy is a powerful tool that works to support consumer spending, business investment, and public confidence, it cannot provide a settled rulebook for international trade," he said during a speech at the Fed's economic symposium in Jackson Hole, Wyoming.
Wall Street, nonetheless, seemed encouraged by Powell's remarks.The Dow Jones average responded quickly by erasing triple digit losses that began Friday morning on news of retaliatory trade measures by China. Several other indexes also moved into positive territory. The boost was short-lived, however, as markets plummeted after Trump tweeted that he would be responding to new Chinese tariffs later in the day.
In his remarks, Powell said that since the Fed cut rates last month, global occurrences have been "eventful" and point to further evidence of a forthcoming economic slowdown. The recent events include escalated trade tensions between the U.S. and China, the increased possibility of a so-called "hard Brexit," the dissolution of the government in Italy, and unrest in Hong Kong.
Powell said that such global uncertainties, along with the trade disputes and muted inflation, were significant risks weighing on the U.S.' historically strong economy.
"Based on our assessment of the implications of these developments, we will act as appropriate to sustain the expansion," he said, without offering an indication about where the Fed stands on further interest rate cuts.
Last month's rate cut — announced on July 31 — marked the first time the central bank lowered interest rates since 2008, in the middle of the financial crisis. Markets fell after that cut, however, because the Fed said the lowering was a "recalibration" and not the start of the rate-slashing cycle.
President Trump has repeatedly lambasted the Fed, which has historically been above partisan politics, for not lowering interest rates to spur further economic growth — despite the country's unprecedented low unemployment levels and strong price stability.
Following Powell's speech on Friday, Trump railed against Fed, tweeting "It is incredible that they can 'speak' without knowing or asking what I am doing." He also went after Powell personally, asking "who is our bigger enemy, Jay Powell or Chairman Xi?" — referring to Chinese President Xi Jinping.
Powell — who was appointed by Trump in 2017 to replace Janet Yellen — has consistently said the Fed is not influenced by political pressures.
In his speech, Powell said that the Fed was examining all of its "monetary policy tools" to foster the U.S. economy and was even debating whether it "should expand our toolkit." There are, Powell added, "no recent precedents to guide any policy response to the current situation."
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
