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."
Joe Cecela, Dream Exchange CEO, explains how they are aiming to form the first minority-controlled company to operate an exchange in U.S. history. Watch!
A Michigan judge is putting sponges in the hands of shoplifters and ordering them to wash cars in a Walmart parking lot when spring weather arrives. Genesee County Judge Jeffrey Clothier hopes the unusual form of community service discourages people from stealing from Walmart. The judge also wants to reward shoppers with free car washes. Clothier says he began ordering “Walmart wash” sentences this week for shoplifting at the store in Grand Blanc Township. He believes 75 to 100 people eventually will be ordered to wash cars this spring. Clothier says he will be washing cars alongside them when the time comes.
The State Department had been in talks with Elon Musk’s Tesla company to buy armored electric vehicles, but the plans have been put on hold by the Trump administration after reports emerged about a potential $400 million purchase. A State Department spokesperson said the electric car company owned by Musk was the only one that expressed interest back in May 2024. The deal with Tesla was only in its planning phases but it was forecast to be the largest contract of the year. It shows how some of his wealth has come and was still expected to come from taxpayers.
At 100 years old, the Goodyear Blimp is an ageless star in the sky. The 246-foot-long airship will be in the background of the Daytona 500 — flying roughly 1,500 feet above Daytona International Speedway, actually — to celebrate its greatest anniversary tour. Even though remote camera technologies are improving regularly and changing the landscape of aerial footage, the blimp continues to carve out a niche. At Daytona, with the usual 40-car field racing around a 2½-mile superspeedway, views from the blimp aptly provide the scope of the event.
You'll just have to wait for interest rates (and prices) to go down. Plus, this deal's a steel, the big carmaker wedding is off, and bribery is back, baby!
It’s a chicken-and-egg problem: Restaurants are struggling with record-high U.S. egg prices, but their omelets, scrambles and huevos rancheros may be part of the problem. Breakfast is booming at U.S. eateries. First Watch, a restaurant chain that serves breakfast, brunch and lunch, nearly quadrupled its locations over the past decade to 570. Fast-food chains like Starbucks and Wendy's added more egg-filled breakfast items. In normal times, egg producers could meet the demand. But a bird flu outbreak that has forced them to slaughter their flocks is making supplies scarcer and pushing up prices. Some restaurants like Waffle House have added a surcharge to offset their costs.
William Falcon, CEO and Founder of Lightning AI, discusses the ongoing feud between Elon Musk and Sam Altman, and how everyday people can use AI in their lives.
