Fed bets rate cut can protect the economy. Investors aren’t so sure.

Amid concerns about low inflation and threats to the global economy, including a protracted trade war between the United States and China, the Federal Reserve cut interest rates by a quarter point on Wednesday.

Many investors expected the decision, but shortly after the central bank made the announcement, Wall Street signaled its dissatisfaction with Federal Reserve Chairman Jerome Powell for not explicitly committing to more cuts.

Markets fell, and President Donald Trump, who has become the Fed’s most-outspoken critic, piled on.

“What the Market wanted to hear from Jay Powell and the Federal Reserve was that this was the beginning of a lengthy and aggressive rate-cutting cycle,” he wrote on Twitter. “We are winning anyway, but I am certainly not getting much help from the Federal Reserve!”

There had been much speculation ahead of the Fed’s July meeting as to whether Powell would bow to presidential pressure to slash rates. Trump has relentlessly attacked the Fed — an independent agency which, like other central banks around the world, is insulated from short-term political interests — and its key decision-makers, several of whom are his own appointees.

While Trump continues to encourage policymakers to cut interest rates more substantially, Powell has repeatedly emphasized that the president’s comments have not, and will not, affect the Fed’s decision-making. He has also stressed the central bank’s dependence on data and economic indicators.

“We never take into account political considerations,” Powell said on Wednesday, during a press conference after the vote to cut rates. “We don’t conduct monetary policy to prove our independence.”

When the Fed issues a statement, which it does after each of its eight monetary policymaking meetings each year, investors parse every phrase. When the Fed chairman speaks, they listen carefully. During Powell’s news conference on Wednesday, the Dow Jones Industrial Average fell more than 400 points after he characterized the July rate cut as a “midcycle adjustment.”

That language spooked investors. As the news conference continued, Powell tried to clarify his remarks — and the Fed’s outlook.

“I said it’s not the beginning of a long series of rate cuts,” he said. “I didn’t say it’s just one.”

Wednesday’s rate cut was characterized as an “insurance cut” to protect the U.S. economy from global contagion, which Powell described as “something that we’ve not faced before.”

“There isn’t a lot of experience in responding to global trade tensions,” he told reporters at the press conference. “It’s something we’re learning by doing.”

There is a long list of trouble spots around the world of concern to Powell and his fellow board members, said Scott Brown, chief economist at Raymond James.

“China is dealing with a number of economic issues. A hard Brexit is looking more likely. Europe’s economy is weak. The IMF recently downgraded its outlook for global growth (again) and continued to stress that the risks to the outlook are weighted to the downside,” wrote Brown in a note to clients.

But perhaps the greatest source of uncertainty for the Fed is Trump’s tariffs-driven trade policy, which has led to a monthslong trade war with China and heated rhetoric with other key trade partners, including Mexico, Canada and the European Union.

As the Fed met in Washington this week, U.S. and Chinese negotiators gathered in Shanghai, trying again to make progress on a trade agreement that had stalled after Trump blacklisted Chinese tech giant Huawei. Trump has continued to goad the Chinese, tweeting this week that Beijing “was supposed to start buying our agricultural product now — no signs that they are doing so.”

“That is the problem with China, they just don’t come through,” Trump wrote.

“I believe it doesn’t make any sense for the U.S. to exercise its campaign of maximum pressure at this time,” Chinese Foreign Ministry spokeswoman Hua Chunying said on Wednesday. “It’s pointless to tell others to take medication when you’re the one who is sick.”

In a statement, the White House said another round of meetings is not likely to take place until September.

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