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在线翻译:
szdaily -> World Economy -> 
Fed’s commitment to act upstaged by Trump’s furor
    2019-08-26  08:53    Shenzhen Daily

U.S. Federal Reserve Chair Jerome Powell said the central bank would “act as appropriate” to keep the U.S. economy healthy in a deteriorating global economy, but stopped short of committing to rapid-fire rate cuts and drew fire from President Donald Trump.

Powell had barely completed a key Friday morning speech when Trump ratcheted up his war of words against both the Fed chairs he appointed.

Trump raised the ante with additional tariffs on China on Friday, which could force the Fed to cut rates to keep the 10-year expansion under way.

Data reported as Powell was speaking Friday showed further deterioration in the U.S. housing market, on the heels of figures earlier in the week showing weakness in the manufacturing sector.

But the message from both Powell and his second in command, vice chair Richard Clarida, was that while the Fed may be willing to cut to protect the recovery, it made no promises.

“We take our policy decisions one meeting at a time,” Clarida said late Friday afternoon, after Wall Street trading had closed with key indexes down from 2 percent to 3 percent.

The Fed cut rates for the first time in more than a decade last month, backing Powell’s verbal commitment to sustain the expansion with action. Powell on Friday made clear that commitment is still in place in a speech he gave at an annual Fed retreat at a Jackson Hole valley resort set against the Grand Teton mountains.

He said there are “significant” risks to the economy, including the trade dispute, the chaotic British exit from the European Union and signs of a global economic slowdown.

But he also said the domestic U.S. economy is in a “favorable place” now and he stressed limits to the Fed’s ability to respond to the trade issues. He also said officials need to “look through” short-term turbulence, and stopped short of endorsing or signaling the pace and depth of rate cuts markets widely expect and that Trump has demanded.

There are “no recent precedents to guide any policy response to the current situation,” Powell said, adding that monetary policy “cannot provide a settled rulebook for international trade.”

The U.S. president fumed about the Fed doing “NOTHING” in a series of tweets. Markets swung when he added that “our great American companies are hereby ordered to immediately start looking for an alternative to China.”

Global stock markets fell, with the U.S. S&P 500 index closing down more than 2 percent. U.S. benchmark Treasury yields fell to their lowest level in a week and the U.S. dollar declined broadly.

Fed officials say tariffs and trade tension are causing businesses to put off spending.

“It’s pretty clear to me that Powell was sending a message that if you are so concerned about the economy, lowering rates is not going to help you,” said Craig Bishop, lead strategist of the fixed income group at RBC Wealth Management. “You need to do something about trade. That’s not a message Trump gets.”

The trade war has left world central bankers on edge as they also try to navigate a global slowdown many attribute to Trump’s trade tactics, which they worry may have lasting repercussions.

“Without question the euphemism of ‘trade tensions’ does not do justice to the scale of the impact of recent trade actions, actual and potential, and to some extent the fundamental challenge to the nature of the trading system,” Bank of England Governor Mark Carney said. (SD-Agencies)

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