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 New York Times and President Donald Trump are fighting again. The news outlet said Wednesday it won't be deterred by Trump's “false and inflammatory language” from writing about the 79-year-old president's health. The Times has done a handful of stories on that topic recently, including an opinion column that said Trump is “starting to give President Joe Biden vibes.” In a Truth Social post, Trump said it might be treasonous for outlets like the Times to do “FAKE” reports about his health and "we should do something about it.” The Republican president already has a pending lawsuit against the newspaper for its past reports on his finances.
OpenAI has appointed Slack CEO Denise Dresser as its first chief of revenue. Dresser will oversee global revenue strategy and help businesses integrate AI into daily operations. OpenAI CEO Sam Altman recently emphasized improving ChatGPT, which now has over 800 million weekly users. Despite its success, OpenAI faces competition from companies like Google and concerns about profitability. The company earns money from premium ChatGPT subscriptions but hasn't ventured into advertising. Altman had recently announced delays in developing new products like AI agents and a personal assistant.
President Donald Trump says he will allow Nvidia to sell its H200 computer chip used in the development of artificial intelligence to “approved customers” in China. Trump said Monday on his social media site that he had informed China’s leader Xi Jinping and “President Xi responded positively!” There had been concerns about allowing advanced computer chips into China as it could help them to compete against the U.S. in building out AI capabilities. But there has also been a desire to develop the AI ecosystem with American companies such as chipmaker Nvidia.
U.S. sports betting is booming as NFL and college football fuel massive activity. BetMGM CEO Adam Greenblatt breaks down trends, growth, and what’s next.
President Donald Trump says a deal struck by Netflix last week to buy Warner Bros. Discovery “could be a problem” because of the size of the combined market share. The Republican president says he will be involved in the decision about whether federal regulators should approve the deal. Trump commented Sunday when he was asked about the deal as he walked the red carpet at the Kennedy Center Honors. The $72 billion deal would bring together two of the biggest players in television and film and potentially reshape the entertainment industry.
Disney's changes to a program for disabled visitors are facing challenges in federal court and through a shareholder proposal. The Disability Access Service program, which allows disabled visitors to skip long lines, was overhauled last year. Disney now mostly limits the program to those with developmental disabilities like autism who have difficulty waiting in lines. The changes have sparked criticism from some disability advocates. A shareholder proposal submitted by disability advocates calls for an independent review of Disney's disability policies. Disney plans to block this proposal, claiming it's misleading. It's the latest struggle by Disney to accommodate disabled visitors while stopping past abuses by some theme park guests.
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With disengagement rising and hybrid work shifting, 'Everybody Matters' author Bob Chapman explains why treating people well could define the future of work.
We sat down with Ali Furman, U.S. Consumer Markets Industry Leader at consulting firm PwC to ask what trends she garnered from the initial data this year.
