As Federal Reserve Chair Jerome Powell kept the focus Thursday on global risks that could trigger a Fed rate cut in coming weeks, his colleagues from regional Fed districts painted a rosier picture of continued US economic growth and a solid business outlook. -China trade war and other issues that he suggested could point to a need for stimulus.
Though the US government reported strong job growth for June, other major economies' "data have continued to disappoint".
"Manufacturing, trade and investment are weak all around the world".
Inflation has been running at slightly lower than the Fed's 2% goal, worrying some Fed officials.
While testifying before the House Financial Services Committee, Powell reiterated that the Fed will act as appropriate to sustain the current economic expansion.More news: The Final Fantasy 7 remake may not be PS4-exclusive at launch
In prepared remarks to Congress, Powell said that crosscurrents such as trade tensions and concerns about global growth continue to weigh on the U.S. economic activity and outlook, the Xinhua news agency reported.
Investors expect that cut with near 100% certainty. "But over the last decade, the Federal Reserve has been banging the inflation beehive with a baseball bat and the bees haven't come out, so they figure keep trying this until something happens".
As a result, the U.S. dollar index, a gauge of the greenback against a basket of other major currencies, fell 0.4 per cent to 97.10 shortly before the settlement of gold futures. The U.S. dollar .DXY fell against a basket of other currencies. The New York-based central banker has a vote on the committee that sets rates.
Powell's statement Wednesday boosted the US stock market as it confirmed for many investors their expectations that the Fed will cut short-term rates for the first time in a decade at its next meeting in late July.
Powell has pointed to a number of national surveys as evidence business confidence took a hit recently, particularly in May after President Donald Trump threatened to impose tariffs on Mexican imports unless his demands about tougher immigration enforcement were met.More news: People are listening to your Google Assistant queries — Surprise
Several policymakers appeared to support cutting rates soon essentially as an insurance policy, because it "could help cushion the effects of possible future adverse shocks to the economy".
The minutes showed widespread concern that the economy is losing steam. A cut could lift home and auto sales by lower the borrowing costs for major purchases. Reducing rates at this point would be similar to the Fed's efforts in the mid-1990s to nurse along a lengthy recovery rather than respond to a looming downturn, and "there's no immediate need to move", Philadelphia Fed President Patrick Harker said yesterday.
Almost 40 percent of economists expected the Fed to lower rates in July, while roughly 30 percent foresaw a rate cut in September, according to a survey released by the Wall Street Journal last month. The minutes may show how strong that sentiment has become.
"Monetary policy is an important tool, but it alone can not address all the economic issues that we face", Williams told students here.More news: Hamilton aiming to bounce back by finding Silverstone 'sweet spot'