Washington, Sept 19 (AFP/APP):The US central bank cut its benchmark interest rate for the second time this year on Wednesday, and Federal Reserve chief Jerome Powell vowed to do whatever is needed to keep the economy growing.
But the Fed’s policy committee is divided, with three of 10 voting members dissenting from the decision, one because he wanted even more stimulus.
Powell said policymakers do not expect a recession, but trade uncertainty is creating “cross winds” that are weighing on the economy amid President Donald Trump’s conflict with China.
Although consumer spending remains strong, “trade uncertainty is having an effect. You see it in weak business investment, weak exports,” Powell told reporters, stressing the Fed will “will act as appropriate to sustain the expansion.”
The Fed’s policy-setting Federal Open Market Committee (FOMC) lowered the policy interest rate by 25 basis points to a target range of 1.75 to 2.0 percent, as expected. With that second rate cut, it has now pulled back on half of the four interest rate increases it implemented in 2018.
While officials continue to believe the most likely outcome is for the economy to continue to grow and inflation to gradually increase, “uncertainties about this outlook remain,” the FOMC said in a statement.
Trump wasted no time in slamming the Fed on Twitter — continuing his relentless campaign to pressure the central bank to provide additional stimulus to the economy.
“Jay Powell and the Federal Reserve Fail Again. No ‘guts,’ no sense, no vision! A terrible communicator!”
But Powell again refused to be drawn into the conflict, saying, “I assure you that my colleagues and I will continue to conduct monetary policy without regard to political considerations.”