Federal Reserve Continues Gradual Rates Hike Despite Potential Trade Fallout

08 July, 2018, 13:12 | Author: Eric Barnett
  • Businesses hit pause on spending amid trade uncertainty: Fed minutes

The Federal Reserve Building stands in Washington April 3, 2012.

Minutes of the Fed's March meeting also showed that officials saw trade rifts between the U.S. and China as risks to the economy's growth.

"[Some] indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy".

The Trump administration has imposed tariffs on steel and aluminum imports.

Meeting three weeks ago, Fed officials reported that their contacts in the steel and aluminum industries - both meant to be beneficiaries of the Trump administration's policies - expected higher prices as a result of the dispute "but had not planned any new investments to increase capacity".

Federal Reserve officials last month said they expect to keep raising interest rates and suggested that by next year, they could be high enough that they could start slowing growth, according to minutes of their discussion released Thursday. He said the following week that, in principle, " changes in trade policy could cause us to have to question the outlook", adding that business contacts were telling the Fed it might be a reason to delay investment or hiring.

Concerns about the Trump administration's trade actions do not, however, overshadow overall positive news about the state of the USA economy, according to the minutes. Canada and Mexico have already slapped new taxes on USA goods, while the US and China are to levy duties on each other's products worth some $34 billion.

Fed policymakers also had a wide-ranging discussion on whether the recently slim spread between short- and long-term interest rates might be a sign of an impending recession.

"A number of participants thought it would be important to continue to monitor the slope of the yield curve", according to the minutes.

Staffers who presented the new gauge, "noted that this measure may be less affected by numerous factors that have contributed to the flattening of the yield curve, such as depressed term premiums at longer horizons".

It seems unlikely that the Federal Reserve Open Market Committee considered the yield curve dynamics and the newly developed barometer as clear pointers to a recession in the making.

Policymakers generally agreed recent economic data showed a strong economy that was evolving in line with their expectations.

Nonetheless, some committee members were wary of the economic outlook in Europe and several emerging markets, which could affect the U.S.



West Pennant Hills shooting: Father of teens killed in bedrooms found dead
As forensic examinations of the home continued on Friday morning, it is understood the teens' bodies were removed just before 6am. Seven ambulances and a helicopter attended, but there was nothing the first responders could do for the children.

Defending champion Roger Federer sent Wimbledon warning
She next faces Italy's Camila Giorgi who saved a match point to beat Katerina Siniakova of the Czech Republic 3-6, 7-6 (8/6), 6-2. Adrian Mannarino came through in five sets against Daniil Medvedev , winning 6-4 6-3 4-6 5-7 6-3 to set up a clash with Federer.

UFC 226 Results: Heavyweight Championship- Stipe Miocic Vs Daniel Cormier
But that said, do yourself a favor and bury your bookmaker this Saturday night and watch Cormier become a two-division UFC champ. Cormier elected to drop to light heavyweight only because his friend Cain Velasquez held the UFC heavyweight belt at the time.

Hsieh saves match point, shocks Halep at Wimbledon
Elsewhere, Rafael Nadal made it to the last 16 with a 6-1 6-2 6-4 win over Australian teenager Alex de Minaur. Of the top 10 seeded players at Wimbledon, only one remains entering the round of 16 - and it isn't No. 1.

Commuters in Boston physically moved a train to rescue a trapped woman
Someone asked if they called 911 and one of them glared "that lady called" he said and pointed to someone in the crowd. Polance tells the Globe she thought the woman wasn't at fault for the incident, because the gap was "too wide".

Croatia breaks Russian hearts, eliminating World Cup host in penalty shootout
At 1-1, Fernandes missed his shot - only the second player to miss in any of the four shootouts at this year's World Cup. The Croats hadn't advanced to the semifinals at the World Cup since 1998, when the country made its first appearance.

UFC 226: Miocic vs. Cormier Results
At that point, he'll loom over not just Cormier, but every other heavyweight in history, as well. He's said UFC 226 will mark the first time he's truly happy with what his contract will pay him.

Steph Curry Announced Some Major Personal News On Instagram
We can only imagine how excited they must be. "Family of 5! @ stephencurry30 #mynewman ". "I'm bless!", he wrote in a caption. His wife, Ayseha Curry, announced the birth of the couple's third child with an Instagram post .

England roar into World Cup semis
Their last semi-final appearance came back in 1990, when they lost to eventual champions West Germany 4-3 on penalties. Among those reacting to the historic win on Twitter was Prince William, who posted to the Kensington Palace account.

Dershowitz calls out MSNBC host, talks about Martha Vineyard fallout
Others said they will stop no longer contribute to organizations that sponsor his discussions. It is sufficient what has been said about the constitution might assist Trump.