Federal Reserve Chairman Jerome Powell has promised that the US Central Bank is poised to act to preserve the US economic expansion in the face of looming risks.
“We see the most likely case for the US and for the world too as continued moderate growth. We're going to continue to act as appropriate to sustain this expansion,” said Powell.
At the same time, he warned that “trade policy uncertainty will be weighing on business investment decisions.”
He also confirmed his readiness to stay out of politics when dealing with monetary policy. “Political factors play absolutely no role in our discussions,” Powell stressed.
The statement comes after US President Donald Trump took to the Twitter on Friday to say that he wonders where he found “this guy Jerome.”
I agree with @jimcramer, the Fed should lower rates. They were WAY too early to raise, and Way too late to cut - and big dose quantitative tightening didn’t exactly help either. Where did I find this guy Jerome? Oh well, you can’t win them all!— Donald J. Trump (@realDonaldTrump) September 6, 2019
Trump was referring to previous remarks by CNBC’s Jim Cramer, who insisted that Powell should acknowledge that he should not have raised interest rates last year.
Last month, Trump wrote on his Twitter page that he was not sure, who is the “bigger enemy” of the United States: Powell, or Chinese President Xi Jinping. He also accused the Federal Reserve of being weak and doing nothing to develop the US economy.
....My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?— Donald J. Trump (@realDonaldTrump) August 23, 2019
Earlier, Trump told Fox Business Network that he has the right to demote and fire Powell.
Powell, for his part, made it clear that he would not step down even if Trump tried to oust him.
"What I have said is the law gives me a four-year term and I fully intend to serve it,” Powell said in July.
Trump’s criticism followed Powell’s statement that the US economy was still performing well, despite the risks that include uncertainty over trade policy. Powell was referring to US-Chinese trade tensions, escalated by Trump’s move to target Chinese goods with new tariffs.
Beijing-Washington Trade Spat Persists
The US-Chinese tariff dispute has been simmering since June 2018, when Trump announced 25 percent tariffs on $50 billion worth of Chinese imports in a bid to balance the trade deficit between the US and China. Since then the sides have exchanged several rounds of duties.
In the latest escalation, China moved to introduce tariffs on roughly $75 billion worth of US goods on crude oil and agricultural products, as well as taxes on US imports of automobiles and their components, starting 1 September and 15 December.
The decision came in response to Trump’s announcement that he would increase existing tariffs on $250 billion in Chinese goods from 25 percent to 30 percent starting 1 October, and raise tariffs on another $300 billion in Chinese products from 10 percent to 15 percent beginning 1 September.