Tue. Feb 18th, 2020

The Fed sees positive prospects in the US despite the commercial uncertainty

The Federal Reserve (Fed) confirmed on Wednesday "positive" economic prospects for "the next few months" in the US. despite the "extended concerns" about the impact of commercial uncertainty, two weeks before its next monetary policy meeting.

"Overall prospects were positive for the coming months, with the expectation of continued modest growth despite widespread concerns about the negative impact of commercial uncertainty," the Fed said in its "beige book," a document in which it collects information about recent economic activity.

Although the indicators continue to show a healthy economy, the president of the US central bank, Jerome Powell, said a week ago that he was considering a cut in interest rates in the face of the global slowdown and trade tensions.

The monetary policy meeting of the Fed, which keeps interest rates between 2.25% and 2.5%, is scheduled for July 30 and 31.

Inflation has softened in 2019 below the Fed's annual target of 2%, which calls into question the economic orthodoxy that dictates that an adjusted labor market and a sustained economic expansion should generate greater increases in prices.

The unemployment rate closed June at 3.7%, in a record not seen in almost half a century, while the annual growth rate in the first quarter of the year stood at a robust 3.1%.

In addition to the economic indicators, the pressure to lower the price of money has also intensified from the White House.

In some unusual statements in Washington, since the Executive has traditionally respected the independence of the central bank, President Donald Trump has been insisting for weeks that the Fed should lower interest rates to support economic activity.

According to Trump, China, the European Union and other actors have been lowering their interest rates and depreciating their currencies, while the United States has been raising interest, which underpins the strength of the dollar, with which the United States loses competitiveness.

(tagsToTranslate) Fed (t) positive (t) perspectives (t) USA (t) uncertainty

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