Powell Rejects Call for Fed to Resist Trump

Powell Rejects Call for Fed to Resist Trump

On Friday, the 6th of September 2019, Federal Reserve Chairman Jerome Powell had reiterated his vow to act as appropriate in order to sustain a decade-long expansion of U.S. economy at a speech in the University of Zurich, Switzerland, a global centre for finance and banking, holding out on to a phrase that global money markets were contemplating as a signal to further interest rate-cut ahead.

Powell, who spoke a few hours after the jobs report, said it was his expectation the United States and world economies would continue to grow moderately and would avoid any recession.

"Investors would like to know how much attention the Fed is paying to the economic data and Donald Trump", Naeem Aslam, chief market analyst at TF Global Markets UK, said in a morning note.

Stocks traded modestly higher as Powell discussed the state of the global economy and domestic monetary policy, with the U.S.in its 11th year of a history-setting expansion.

At the time, Powell was cautious about the possibility of additional cuts.

Powell is the last public Fed speaker ahead of the September 17-18 interest-rate setting meeting.

He added that the Fed will "continue to act as appropriate to sustain this expansion", while "trade policy uncertainty will be weighing on business investment decisions".

The remarks should strengthen widespread expectations that the central bank will cut interest rates later this month.

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"That has supported the economy, that is one of the reasons why the outlook is still a favourable one despite these crosswinds".

Navarro's rhetoric echoed President Trump, who tweeted on Friday: "Where did I find this guy Jerome?"

Powell said the central bank is "not forecasting or expecting, a recession".

Economic uncertainty caused by trade policy is not something that central banks have a lot of experience dealing with, Powell said. "The Fed remains strongly committed to nonpolitical decision-making".

Once low inflation takes hold "you seem to get on this road that is hard to get off of, and we're trying not to get on that road and defend our 2% inflation target", Powell said. We serve all Americans regardless of their political party'.

Dudley has since walked back those comments, but not before they sparked further concerns about political influence on monetary policy.

Instead, on Friday he turned to a concept, the future path of interest rates which was used in the Fed's July statement, when it announced the first rate cut since 2008.

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