Jerome Powell: Federal Reserve ‘will do the right thing to support’ economic ‘expansion’

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Federal Reserve Board Chairman Jerome Powell speaks at a press conference in Washington, DC on May 1, 2019. (Yuri Gripas / Reuters)

Federal Reserve Chairman Jerome Powell said on Friday the central bank was ready to act to extend America’s economic expansion by a decade, now the third longest in the country’s history.

“Our economy is now in a good position,” Powell noted, before warning that “we have seen new evidence of a global slowdown, especially in Germany and China” spurred by developments such as US tariffs on Chinese exports, a potential no-deal Brexit and political unrest in Hong Kong.

“Based on our assessment of the implications of these developments, we will act as appropriate to support the expansion,” Powell said at the central bank’s annual conference in Jackson Hole, Wyo. “Sometimes it will be appropriate for us to tip politics one way or the other because of significant risks.

“The US economy has continued to perform well overall, driven by consumer spending” in the face of recent challenges, said Powell.

Meanwhile, stocks fell on Friday after President Trump lambasted Powell in a pair of tweets, complaining that the Fed had yet to cut interest rates.

Last month, the Federal Open Market Committee lowered its benchmark interest rate by a quarter point to 2.25% despite “moderate” growth and a “strong” job market.

“Bringing trade policy uncertainty into this framework is a new challenge,” said Powell, referring to Trump’s high tariffs on China and other countries. “Although monetary policy is a powerful tool that helps support consumer spending, business investment and public confidence, it cannot provide a set of established rules for international trade. “

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