Business

& # 39; Crosscurrents & # 39; weighing on the economy, so the Fed will & # 39; act as appropriate & # 39;




Business investments across the US have slowed recently, as uncertainties over the economic outlook chained, said Federal Reserve Chair Jerome Powell Wednesday in prepared testimony to the House Financial Services Committee.

"Inflation has run under the Federal Open Market Committee (FOMC) symmetrical 2 percent goal, and cross-flows, such as trading tensions and concerns about global growth, have weighted economic activity and prospects, Powell says in his testimony and that it will be needed to maintain the central bank to maintain the current economic expansion

Fed boss also noted that business investment has slowed "in particular" and that there have been no improvements in recent weeks. Powell will deliver its testimony at 1[ads1]0 am ET and answering questions from lawmakers.

Powell's prepared testimony seemed to confirm market price reductions. Stock futures became positive after the comments were released. The Dow Jones Industrial Average was on its way to a gain of more than 100 points at the opening. [19659002] "There is a risk that weak inflation will be even more persistent than we currently expect," Powell continued to strengthen the case for a rate cut.

"Total growth in the second quarter seems to have moderated," Powell said in the prepared comments. "Many FOMC participants saw that the case for a somewhat more accommodating monetary policy had strengthened. Since then, based on incoming data and other developments, uncertainty about trading tensions and concerns about the strength of the world economy appear to weigh on the US economic outlook. "

Jerome Powell testifies before the Senate of the Banking, Housing and City Committee on the nomination to chair the US Federal Reserve in Washington on November 28, 2017.

Joshua Roberts | Getty Images

The United States and China have been engaged in a trade crisis for more than a year. At the end of the month, the two countries agreed to start trade negotiations in an attempt to end the spit. Meanwhile, data from abroad – especially in Europe – shows weaker economic activity.

Powell listed the economy "performed reasonably well" in the first half of 2019, while consumer spending rose in the second quarter after being weak in the first quarter.

Powell's testimony comes after the Fed opened the door to cut prices at its previous monetary policy meeting in June.

Markets cheered the central bank's remarks, with stock indices reaching full-time levels last week. Traders prize also in a 100% probability of a price cut before the end of July, according to the CME's FedWatch tool.

– CNCC's Jeff Cox and Patti Domm contributed to this report. [19659003] Subscribe to CNBC on YouTube.



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