The following article was published 6 August, in the Wall Street Journal, signed by ex-Fed chiefs Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen. Basically, it states that the US economy functions best when the central bank is free of short-term political pressures.
World stock markets plunged on Monday as Beijing parried US President Donald Trump's latest tariff announcements by moving to let China's Yuan currency devalue and halting purchases of US agricultural products.
Federal Reserve Chair Jerome Powell, who last week cut U.S. interest rates as an insurance policy against the effects of simmering trade tensions, may need to buy more coverage after the United States late on Monday designated China a currency manipulator.
Brazil's central bank slashed interest rates to a record low on Wednesday in response to the worsening outlook for Latin America's biggest economy. The bank cut its main rate to 6% from the previous historic low of 6.5%, which had been unchanged since March 2018.
Optimistic investors drove Wall Street to fresh record highs amid strong expectations of an impending US interest rate cut. The Dow Jones index lifted by 179 points, 0.7 per cent, to 26,966. The broader S&P 500 posted its third consecutive record high, up 0.8 per cent, while the tech-heavy Nasdaq rose 0.75 per cent.
A divided Federal Reserve held the line on interest rates Wednesday and indicated formally that no cuts are coming in 2019. The decision came amid divisions over what is ahead and still leaves open the possibility that policy loosening could happen before the end of the year depending on how conditions unfold.
Brazil’s central bank held its benchmark interest rate at a record-low 6.50% on Wednesday, as expected, holding back from signalling looser policy because of doubts on economic reforms. The scenario outlined by policymakers was one of anaemic economic growth and high levels of economic slack putting downward pressure on inflation at home, plus the prospect of interest rates coming down in major developed economies.
Chairman Jerome Powell said on Tuesday that the Federal Reserve is prepared to respond if it decides the Trump administration's trade conflicts are threatening the U.S. economy. Investors read his remarks as a signal that the Fed will likely cut interest rates later this year.
The United States private sector's mounting debts pose a moderate risk to the world's largest economy, Federal Reserve Chairman Jerome Powell said on Monday.
The US central bank warned on Monday of persistent risks to the financial system posed by elevated stock prices and historically high corporate debt loads as well as the impact of President Donald Trump's trade wars.