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The Fed issues a dire warning about trade wars

The Federal Reserve is warning that an escalating trade war would pose a big threat to the economy.Bu...

Posted: Aug 23, 2018 4:33 AM
Updated: Aug 23, 2018 4:33 AM

The Federal Reserve is warning that an escalating trade war would pose a big threat to the economy.

But it's sticking with its plan to raise interest rates — whether President Donald Trump likes it or not — as long as the economy remains on course.

Policymakers said it would "likely soon be appropriate to take another step" in lifting rates if the economy keeps growing as expected, according to minutes of the most recent meeting released Wednesday.

But Fed officials described the economic threat of a trade war in stronger language than they previously had as a growing risk to their plans.

They discussed at length concerns that a "major escalation" of trade disputes could speed up inflation and cause businesses to pull back on investment.

Such turmoil could wind up reducing household spending and disrupt companies' supply chains, participants noted.

Recent tariff increases have already begun to cause higher prices for some businesses, according to Fed officials. Others have reduced or delay investment spending because of uncertainty about future trade policy.

Still, some Federal Open Market Committee members noted that most businesses concerned about trade disputes hadn't cut back their spending or hiring, but "might do so if trade tensions were not resolved soon."

For now, the central bank is standing by its plan for higher rates as the economy strengthens.

The Fed is expected to raise rates twice more this year, starting in September.

The Fed meeting, held July 31 and August 1, was the first after Trump began lashing out at Fed Chairman Jerome Powell for hiking rates. The president told CNBC in July that was "not thrilled" with the Fed's actions.

He used similar language on Monday in an interview with Reuters, arguing the central bank should be doing more to help the economy.

"I should be given some help by the Fed," said the president, who himself appointed Powell to lead the central bank.

Presidents have historically avoided commenting on Fed policies. The central bank is designed to be independent from political interference.

The Fed's minutes made no mention of Trump's criticism as a factor in its decision-making.

Since Trump took office, the Fed has raised rates five times, including twice this year under Powell. The Fed has been carefully and gradually raising rates over the past several years to keep inflation in check and prevent the economy from overheating.

After two further rate hikes in 2018, it has penciled in three more rate hikes in 2019.

Powell told the "Marketplace" radio show in July that he was "deeply committed" to maintaining Fed independence.

"We do our work in a strictly nonpolitical way, based on detailed analysis, which we put on the record transparently, and we don't take political considerations into account," Powell said in the interview.

Powell is expected to speak on Friday at an annual economic symposium in Jackson Hole, Wyoming.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 294994

Reported Deaths: 6681
CountyCasesDeaths
DeSoto19660230
Hinds18785386
Harrison16679278
Rankin12675264
Jackson12575226
Lee9683160
Madison9448199
Jones7945146
Forrest7204136
Lauderdale6833226
Lowndes6021137
Lamar587680
Lafayette5730113
Washington5218130
Bolivar4608123
Oktibbeha440993
Panola430394
Pearl River4159130
Warren4126114
Pontotoc408769
Marshall403192
Monroe3988126
Union395174
Neshoba3800168
Lincoln3539102
Hancock346974
Leflore3374118
Sunflower318386
Tate302474
Pike300095
Scott293670
Alcorn291761
Itawamba289675
Yazoo288762
Tippah278565
Copiah277757
Coahoma277568
Simpson274778
Prentiss269758
Wayne253741
Marion252578
Leake252471
Covington248879
Grenada247377
Adams234277
George231745
Newton229452
Winston221675
Jasper213245
Tishomingo212165
Attala206569
Chickasaw201151
Holmes181870
Clay179150
Stone172429
Tallahatchie170539
Clarke169371
Calhoun157828
Smith152731
Yalobusha144836
Greene127633
Walthall124140
Noxubee122829
Montgomery122238
Perry121634
Lawrence120221
Carroll118125
Amite111333
Webster110630
Jefferson Davis101731
Tunica99023
Claiborne98429
Benton93324
Humphreys92827
Kemper90123
Quitman77114
Franklin76019
Choctaw69516
Wilkinson62426
Jefferson62327
Sharkey48817
Issaquena1676
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Alabama Coronavirus Cases

Cases: 493252

Reported Deaths: 9929
CountyCasesDeaths
Jefferson709861374
Mobile36108725
Madison32405455
Tuscaloosa24110410
Montgomery22565500
Shelby21929215
Baldwin19732283
Lee14961153
Morgan13659251
Calhoun13275286
Etowah13176319
Marshall11261209
Houston10086261
Elmore9376185
Limestone9359134
Cullman8891181
St. Clair8822223
Lauderdale8603211
DeKalb8446175
Talladega7517163
Walker6518255
Jackson6492102
Autauga626491
Blount6097127
Colbert6001118
Coffee5245102
Dale4640107
Russell404730
Franklin399177
Covington3957106
Chilton3870100
Escambia377472
Tallapoosa3585142
Clarke343650
Chambers3410110
Dallas3403141
Pike293372
Lawrence282984
Marion281895
Winston246767
Bibb245060
Geneva239670
Marengo235855
Pickens224654
Barbour211551
Hale209768
Fayette200256
Butler196166
Henry182441
Cherokee177038
Monroe166139
Randolph163640
Washington156535
Clay144354
Crenshaw144354
Macon142043
Cleburne137739
Lamar132833
Lowndes131051
Wilcox121825
Bullock116936
Conecuh106724
Perry105527
Sumter98331
Coosa88823
Greene87632
Choctaw55023
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