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: 314509

Reported Deaths: 7247
CountyCasesDeaths
DeSoto21626259
Hinds20359415
Harrison17934309
Rankin13634278
Jackson13447246
Madison10099217
Lee9980174
Jones8381163
Forrest7683152
Lauderdale7191241
Lowndes6401147
Lamar623086
Lafayette6200118
Washington5339134
Bolivar4802132
Oktibbeha462798
Panola4588107
Pearl River4512146
Marshall4443103
Warren4393121
Pontotoc420772
Monroe4113133
Union411076
Neshoba4031176
Lincoln3968110
Hancock379386
Leflore3497125
Sunflower336090
Tate334084
Pike3325105
Scott315973
Alcorn313368
Yazoo311669
Itawamba300477
Copiah297065
Coahoma295479
Simpson295288
Tippah288768
Adams286882
Prentiss279760
Marion269280
Leake268373
Wayne262641
Grenada261487
Covington259681
George248048
Newton246861
Winston227281
Tishomingo226967
Jasper221148
Attala214473
Chickasaw207857
Holmes189173
Clay185454
Stone182833
Tallahatchie178841
Clarke178080
Calhoun170832
Yalobusha164338
Smith162434
Walthall133945
Greene130633
Lawrence128624
Montgomery126942
Noxubee126734
Perry126338
Amite123142
Carroll121829
Webster114532
Jefferson Davis107133
Tunica105726
Claiborne102430
Benton99525
Humphreys96733
Kemper95828
Franklin83823
Quitman80916
Choctaw76418
Wilkinson67331
Jefferson65728
Sharkey50217
Issaquena1686
Unassigned00

Alabama Coronavirus Cases

Cases: 532895

Reported Deaths: 11001
CountyCasesDeaths
Jefferson771431528
Mobile41089808
Madison34837505
Tuscaloosa25810454
Montgomery24355588
Shelby23730249
Baldwin21191309
Lee15892171
Calhoun14522316
Morgan14324279
Etowah13861353
Marshall12250223
Houston10581281
Elmore10060205
Limestone9986151
Cullman9705194
St. Clair9702243
Lauderdale9441242
DeKalb8846187
Talladega8255176
Walker7246277
Autauga6938108
Jackson6815112
Blount6694137
Colbert6310134
Coffee5524119
Dale4850111
Russell443238
Chilton4308112
Franklin426282
Covington4136118
Tallapoosa4039152
Escambia393977
Chambers3578123
Dallas3557152
Clarke351161
Marion3130101
Pike311377
Lawrence300798
Winston275673
Bibb261564
Geneva251477
Marengo249664
Pickens234761
Barbour231756
Hale223277
Butler216469
Fayette212562
Henry189044
Cherokee184745
Randolph181742
Monroe178040
Washington167639
Macon159950
Clay156857
Crenshaw152757
Cleburne149141
Lamar142935
Lowndes139053
Wilcox127130
Bullock122841
Conecuh110629
Coosa107928
Perry107826
Sumter104832
Greene92534
Choctaw61124
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