Federal Reserve Chairman Jerome Powell told lawmakers on Wednesday that “uncertainties” in the economy have increased in recent months, indicating that the U.S. central bank will likely cut interest rates at the end of July to sustain growth.
Stocks spiked ahead of Powell’s remarks to the House Committee on Financial Services, with the S&P 500 topping 3,000 points for the first time ever.
“In particular, economic momentum appears to have slowed in some major foreign economies, and that weakness could affect the U.S. economy,” Powell said. “And there is a risk that weak inflation will be even more persistent than we currently anticipate.”
Powell added, nonetheless, that the economy has “performed reasonably well” so far in 2019, which is the 11th consecutive year of economic growth.
Yet the country’s enduring trade disputes, the rising federal debt ceiling, and global uncertainties, such as Brexit, all could potentially threaten the economic growth in the U.S., according to the Fed.
“We are carefully monitoring these developments, and we will continue to assess their implications for the U.S economic outlook and inflation,” Powell said.
The concerns, which Powell referred to as "crosscurrents," appear to remain despite the strong jobs report released last week and a thawing of trade tensions with China following the G-20 Summit in Japan.
The Fed is set to gather later this month for its Federal Open Market Committee meeting, which is held eight times a year to determine necessary adjustments on interest rates and other monetary policies. A cut in interest rates to spur growth has been widely anticipated, especially after the central bank decided to keep rates steady in June.
Powell — who was nominated by President Trump to chair the Fed in 2017 — and the Fed have repeatedly been attacked by the president for not cutting interest rates.
Just last month, Trump slammed the Fed, which has historically stayed above the fray of politics, saying that the bank “doesn’t know what it is doing” and bemoaned decisions to raise interest rates “far too fast.”
"This president has made it very clear that he has no understanding or respect for the independence of the Federal Reserve," Rep. Maxine Waters (D-Calif.), the committee’s chairwoman, said at the hearding. "It is essential that the Federal Reserve maintains its independence from the executive branch."
In response to a question from Waters, Powell said Wednesday that he would not step down if Trump demanded his resignation.
“The law clearly gives me a four-year term and I fully intend to serve it,” he said.
A big-screen adaptation of the anime “Chainsaw Man” has topped the North American box office, beating a Springsteen biopic and “Black Phone 2.” The movie earned $17.25 million in the U.S. and Canada this weekend. “Black Phone 2” fell to second place with $13 million. Two new releases, the rom-com “Regretting You” and “Springsteen — Deliver Me From Nowhere,” earned $12.85 million and $9.1 million, respectively. “Chainsaw Man – The Movie: Reze Arc” is based on the manga series about a demon hunter. It's another win for Sony-owned Crunchyroll, which also released a “Demon Slayer” film last month that debuted to a record $70 million.
The Federal Aviation Administration says flights departing for Los Angeles International Airport were halted briefly due to a staffing shortage at a Southern California air traffic facility. The FAA issued a temporary ground stop at one of the world’s busiest airports on Sunday morning soon after U.S. Transportation Secretary Sean Duffy predicted that travelers would see more flights delayed as the nation’s air traffic controllers work without pay during the federal government shutdown. The hold on planes taking off for LAX lasted an hour and 45 minutes and didn't appear to cause continued problems. The FAA said staffing shortages also delayed planes headed to Washington, Chicago and Newark, New Jersey on Sunday.
Boeing workers at three Midwest plants where military aircraft and weapons are developed have voted to reject the company’s latest contract offer and to continue a strike that started almost three months ago. The strike by about 3,200 machinists at the plants in the Missouri cities of St. Louis and St. Charles, and in Mascoutah, Illinois, is smaller in scale than a walkout last year by 33,000 Boeing workers who assemble commercial jetliners. The president of the International Association of Machinists says Sunday's outcome shows Boeing hasn't adequately addressed wages and retirement benefits. Boeing says Sunday's vote was close with 51% of union members opposing the revised offer.
The stunning indictment that led to the arrest of more than 30 people — including Miami Heat guard Terry Rozier and other NBA figures — has drawn new scrutiny of the booming business of sports betting in the U.S. The multibillion-dollar industry has made it easy for sports fans — and even some players — to wager on everything from the outcome of games to that of a single play with just a few taps of a cellphone. But regulating the rapidly-growing industry has proven to be a challenge. Professional sports leagues’ own role in promoting gambling has also raised eyebrows.
Tesla, the car company run by Elon Musk, reported Wednesday that it sold more vehicles in the past three months after boycotts hit hard earlier this year, but profits still fell sharply. Third-quarter earnings fell to $1.4 billion, from $2.2 billion a year earlier. Excluding charges, per share profit of 50 cents came in below analysts' estimate. Tesla shares fell 3.5% in after-hours trading. Musk said the company's robotaxi service, which is available in Austin, Texas, and San Francisco, will roll out to as many as 10 other metro areas by the end of the year.
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