Business

Fed chief Powell: Trade, global growth continue to weigh on US economy

WASHINGTON: Concerns about trade policy and a weak global economy "continue to weigh on the US economic outlook" and the Federal Reserve stands ready to act to sustain a decade-long expansion, Fed chairman Jerome Powell said yesterday.

In prepared remarks to a congressional committee, Mr Powell contrasted the Fed's "baseline outlook" of continued US growth against a set of risks - including persistently weak inflation, slower growth in other major economies, and a downturn in business investment driven by uncertainty over just how long the Trump administration's trade war with China and other countries will last and how intense it will become.

Fed officials at their June policy meeting signalled those concerns might warrant lower rates.

Mr Powell noted that business investment, an important component of economic growth, "seems to have slowed notably". Also, "there is a risk that weak inflation will be even more persistent" than anticipated and not prove as transitory as the Fed had insisted. - REUTERS

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