Fed Says Trade War Downturn Could Pose Challenges

Associated Press |

WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell says that the central bank has tools it could use to cushion the adverse effects a trade war might have on the economy. But he tells Congress the effort could be challenging if higher tariffs push inflation up too sharply.

Powell says if the retaliatory tariffs imposed by other countries caused the U.S. economy to slow, the Fed could employ its normal tools, such as lowering interest rates.

But he says that could become complicated if higher U.S. tariffs on foreign products caused inflation to accelerate. That's because the Fed's normal response to higher inflation is to raise interest rates, not lower them.

"If we do have higher inflation, that could be very challenging for policy," Powell says.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer



Symbol Last Price Change % Change










World Economic Forum at Davos 2019 - Dominic Briggs General Partner Blockwall Management

Matt Bird sits down with Dominic Briggs, General Partner Blockwall Management at the World Economic Forum at Davos 2019

Emerging Growth

Radient Technologies Inc.

Radient Technologies Inc is engaged in research, development and commercialization of environmentally responsible technology for the extraction, isolation and purification of soluble products from a wide range of materials using…