Federal Reserve chairman Jerome Powell today acknowledged that the economy has grown more turbulent in the three weeks since the Fed cut rates for the first time in a decade.
However, he stopped short of giving any indication about what might be coming at the next rate-setting meeting in September.
“We are carefully watching developments as we assess their implications for the US outlook and the path of monetary policy,” Powell said, speaking at an annual economic symposium in Jackson Hole, Wyoming.
He reinforced his pledge that policymakers will continue to take “appropriate” steps to support the US economy’s longest-running expansion amid signs of a slowdown.
The backdrop of his remarks: They come as Trump has dialed up his demands for the Fed to aggressively cut rates.
Here’s what the President tweeted just an hour before Powell was set to take the stage at the economic conference:
In his speech, Powell described the last three weeks since the Fed meet in July as “eventful,” running through a list of developments that have shuddered markets:
- An escalation of tariffs in an ongoing trade war between the US and China
- the growing possibility of a “hard Brexit,” with the UK’s departure from the European Union
- a global slowdown, most notably in Germany and China
In recent months, the Fed has made clear that it is carefully considering trade uncertainty, a global growth slowdown and subdued inflation as it’s sought to calibrate the right mix of policy in setting interest rates.
But Powell emphasized to a room of central bankers and economists that there’s “no recent precedents” for the Fed to guide how policymakers should account for such trade policy uncertainty.
“Fitting trade uncertainty into this framework is a new challenge,” said Powell.
Even in this “challenging era,” Powell said, the US economy is in a “favorable place,” which he partly attributed to the Fed’s decision to cut rates in July for the first time since the financial crisis of 2008.