No additional interest rate cuts planned, says Fed Chair Jerome Powell, upsetting Trump

Federal Reserve Chairman Jerome H. Powell said Tuesday the U.S. economy appears durable with steady growth and unemployment near a half-century low but faces some risk from the broadening coronavirus outbreak that began in China.

Giving the Fed’s semiannual monetary report to Congress, Powell said that the Fed is content with where interest rates are, suggesting that no further rate cuts are being contemplated unless economic conditions were to change significantly.

President Trump let it be known in a tweet during that appearance Tuesday that he was not happy with Powell’s message on interest rates.

”Fed rate is too high. Dollar tough on exports,” Trump said in a tweet, saying the Dow Jones industrial average had fallen into negative territory on Powell’s comments. The Dow, however, rebounded and was in positive territory at midday as Powell spoke.

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Powell said the Fed is monitoring developments stemming from the new strain of the coronavirus, which he said “could lead to disruptions in China that spill over to the rest of the global economy.”

In response to lawmakers’ questions, Powell said it was too early to assess the threat the virus poses to the U.S. economy but he noted that the U.S. economy “is in a very good place” with strong job creation and moderate growth.

Powell said there will be effects on China through the first half of this year and likely there will be some effect on the United States, but it’s too soon to say how adverse the U.S. impact will be.

“We will be watching that carefully. And the question we will be asking is will these be persistent effects that could lead to a material reassessment of the outlook” in the United States, Powell told the House committee.

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