The Federal Reserve is widely expected to leave monetary policy unchanged at its meeting in the coming week.

Those bets come in an environment where the economy continues to grow, albeit with intensifying risks, and transportation fuel costs are pushing inflation higher.

Fed Cut Bets Remain More Likely Than Hikes

US President Donald Trump has said he will announce his nominee to replace Federal Reserve Chair Jerome Powell within the next few weeks, intensifying a growing standoff between the White House and the central bank. The comments come after Powell revealed that the Department of Justice has issued grand jury subpoenas to the Federal Reserve, raising fears of political pressure on the institution despite easing inflation data.


USA FED: Concerns Rise Over Central Bank Independence Under Trump 

In the U.S., the battle between President Donald Trump and Federal Reserve Chairman Jerome Powell is heating up. Powell says that the Department of Justice has issued grand jury subpoenas to the Federal Reserve, threatening a possible criminal indictment linked to his congressional testimony last June.


USA: Ex-Fed Leaders Call Investigation into Powell 'Unprecedented' | WION

U.S. Federal Reserve Chair Jerome Powell says the Department of Justice has issued grand jury subpoenas to the Federal Reserve, threatening a possible criminal indictment linked to his June congressional testimony about renovations and monetary policy decisions. Powell framed the legal action as politically motivated pressure aimed at influencing rate policy and defended the Fed’s independence amid growing tensions.

Powell Links Legal Action To Rate Policy Stance

The British government has come under sustained criticism after a prosecution against two men accused of spying for China collapsed last month, with critics saying it was because of fears of upsetting Beijing


UK intelligence agency says China stole data of almost every UK citizen 

UK: Opposition leader Kemi Badenoch alleged that “the prime minister wants to suck up to Beijing,” accusing Starmer of failing to prioritise national security.


UK opposition accuses govt of prioritising China ties over security 

No.10 Downing Street has denied any involvement in the controversial decision not to prosecute two British men — one of them a former parliamentary researcher — who were accused of spying for China.


UK government faces growing pressure over collapsed China spy case

Keir Starmer's national security chief has been accused of being too close to China following allegations over his involvement in the collapse of a Chinese spy trial. 

Jonathan Powell is facing scrutiny across the political divide after he reportedly refused to call Beijing an 'enemy' of the UK in evidence for the case against a parliamentary researcher and a business consultant.

UK PM's security advisor accused of Chinese spy trial collapse 

Federal Reserve Chair Jerome Powell’s upcoming speech at the Jackson Hole Economic Symposium has investors on edge, with concerns that his comments may signal stricter monetary policies, potentially unsettling Wall Street.


Powell Set to Potentially Disappoint Wall Street at Jackson Hole

All eyes are on the US Federal Reserve as it prepares for a key policy announcement. Investors expect the Fed to keep rates unchanged, but markets remain tense amid global macroeconomic uncertainty and a weakening dollar. What will this mean for inflation, stocks, and currencies?

US Fed likely to keep rates unchanged on May 7

President Donald Trump threatened to remove Jerome Powell as chair of the Federal Reserve. Trump also expressed his displeasure that interest rates had not been cut recently. Trump, blasting the Fed chair as being too slow to lower rates, said, "I'm not happy with him. I let him know it. "

Is the US Central Bank really independent?

US President Donald Trump once again lashed out at Federal Reserve Chief Jerome <a href="https://www.wionews.com/videos/powell-crypto-has-gone-mainstream-now-it-needs-rules-8971166">Powell</a>, calling him "TOO LATE AND WRONG" over his inflation remarks.&nbsp;
Trump also asked Powell to lower interest rates in the country and called for his termination.&nbsp;
In a post on Truth Social, the US president said, "The ECB is expected to cut interest rates for the 7th time, and yet, &ldquo;Too Late&rdquo; Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete &ldquo;mess!&rdquo;
Also read: <a href="https://www.wionews.com/world/is-trumps-tariff-war-pushing-desperate-china-closer-to-its-neighbours-heres-how-beijing-wants-to-team-up-with-india-8969819">Is Trump&rsquo;s tariff war pushing 'desperate' China closer to its neighbours? Here's how Beijing wants to 'team up' with India</a>
Trump in his post continued, "Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell&rsquo;s termination cannot come fast enough!."
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<h2>Powell's warning</h2>
On Wednesday, during an event hosted by the Economic Club of Chicago, Powell said that Trump's significant policy changes are unlike anything seen in modern history.&nbsp;
Powell warned that Trump's trade tariffs pose a serious risk to the American economy by potentially accelerating inflation and dampening economic growth.
WATCH | <a href="https://www.wionews.com/videos/us-china-trade-war-us-imposes-245-tariffs-on-chinese-imports-8969057">US-China trade war: US imposes 245% tariffs on Chinese imports</a>
He added that &ldquo;the level of the tariff increases announced so far is significantly larger than anticipated&rdquo; and that the lingering uncertainty around tariffs could inflict lasting economic damage.&nbsp;
"Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said, adding that the inflationary effects "could also be more persistent."
Despite the threat, Powell cleared that the Fed would not rush to intervene and no immediate changes would be made to the current interest rate range of 4.25 to 4.50 per cent.
Also read: <a href="https://www.wionews.com/videos/powell-says-2024-inflation-forecast-has-kind-of-fallen-apart-785168">Powell Says 2024 Inflation Forecast Has 'Kind Of Fallen Apart'</a>

Powell warned that Trump's trade tariffs pose a serious risk to the American economy by potentially accelerating inflation and dampening economic growth. WORLD

US President Donald Trump once again lashed out at Federal Reserve Chief Jerome Powell, calling him "TOO LATE AND WRONG" over his inflation remarks. Trump also asked Powell to lower interest rates in the country and called for his termination. In a post on Truth Social, the US president said, "The ECB is expected to cut interest rates for the 7th time, and yet, “Too Late” Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete “mess!” Also read: Is Trump’s tariff war pushing 'desperate' China closer to its neighbours? Here's how Beijing wants to 'team up' with India Trump in his post continued, "Oil prices are down, groceries (even eggs!) are down, and the USA is getting RICH ON TARIFFS. Too Late should have lowered Interest Rates, like the ECB, long ago, but he should certainly lower them now. Powell’s termination cannot come fast enough!." Powell's warning On Wednesday, during an event hosted by the Economic Club of Chicago, Powell said that Trump's significant policy changes are unlike anything seen in modern history. Powell warned that Trump's trade tariffs pose a serious risk to the American economy by potentially accelerating inflation and dampening economic growth. WATCH | US-China trade war: US imposes 245% tariffs on Chinese imports He added that “the level of the tariff increases announced so far is significantly larger than anticipated” and that the lingering uncertainty around tariffs could inflict lasting economic damage. "Tariffs are highly likely to generate at least a temporary rise in inflation," Powell said, adding that the inflationary effects "could also be more persistent." Despite the threat, Powell cleared that the Fed would not rush to intervene and no immediate changes would be made to the current interest rate range of 4.25 to 4.50 per cent. Also read: Powell Says 2024 Inflation Forecast Has 'Kind Of Fallen Apart'

'TOO LATE Jerome Powell': Trump bashes Fed Reserve Chief, calls for his termination - Here's why

The Federal Reserve delivered a quarter-point interest-rate cut on thursday — the second-straight reduction as widely expected. While the fed suggested a steady rat-cut path in the current easing cycle, economists and investors have reduced their bets for how low rates will fall, partially because of Trump's win.

Fed Delivers Back-to-back Rate Cuts, Signals Steady Easing Path

The US Federal reserve cut rates by 50 basis points. With mounting concerns about the job market, federal reserve chair Jerome Powell and his colleagues halted their laser-like focus on reducing inflation. The half-point cut reflects an effort to manage the shifting balance of risks at a potential crossroads for the economy.

Powell says half-point cut reflects 'risk management' approach

Powell, the head of the Federal Reserve, stated that the time has come for the institution to lower its benchmark policy rate. His remarks on Friday supported forecasts that the Fed will begin reducing interest rates next month in order to stop the labor market from falling off any more. The Fed Chief also stated that inflation has been declining in the direction of the bank's objective.

Fed Chief Powell convinced Inflation rate is on right path | World Business Watch | WION

The Federal Reserve may need to raise interest rates further to ensure inflation is contained, Fed Chair Jerome Powell said on Friday, nodding both to easing price pressures and the surprising overperformance of the U.S. economy and promising to move "carefully" at upcoming meetings.

Powell said Fed policymakers would proceed with care as they "decide whether to tighten further," but also made clear that the central bank has not yet concluded that its benchmark interest rate is high enough to be sure that inflation returns to the 2% target.

"It is the Fed’s job to bring inflation down to our 2% goal, and we will do so," Powell said in a keynote address to the Jackson Hole Economic Policy Symposium. "We have tightened policy significantly over the past year. Although inflation has moved down from its peak - a welcome development - it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective."

Also Read | <a href="https://www.wionews.com/world/explained-with-prigozhin-dead-wagner-groups-bloodied-past-tumultuous-present-uncertain-future-629170">With Prigozhin dead, Wagner group's bloodied past, tumultuous present &amp; uncertain future</a>

In that context, recent data has raised a new concern, he said.

"We are attentive to signs that the economy may not be cooling as expected," with consumer spending "especially robust" and the housing sector possibly rebounding, Powell said.

The economy continues to grow above trend, Powell said, and if that continues "it could put further progress on inflation at risk and could warrant further tightening of monetary policy."

His remarks showed the Fed wrestling with conflicting signals from an economy where inflation has by some readings slowed a lot without much cost to the economy - a good outcome, but one that has raised the possibility that Fed policy is not restrictive enough to complete the job.

Also Read | <a href="https://www.wionews.com/world/greek-wildfires-are-worst-in-europe-in-decades-says-eu-backed-climate-service-629165">Greek wildfires are worst in Europe in years, says EU-backed climate service</a>

Unlike in last year's speech at the closely watched annual conference hosted by the Federal Reserve Bank of Kansas City - a terse warning of more tightening to come - Powell did not warn households of coming "pain" from further policy tightening. But neither did he signal that rate cuts were anywhere close, or nod as some policymakers have done to the need to adjust rates downward once inflation cools more sustainably.

<h2>Finger on the trigger</h2>

Markets reacted by continuing to price in only a modest chance of a rate hike next month - less than 20%, based on rate futures pricing - but an increasing likelihood of a rate hike at one of the Fed's following two meetings - on Oct. 31-Nov. 1 and Dec. 12-13 - with prices indicating a better-than-50% chance of the policy rate ending the year in a 5.5%-5.75% range.

"My main takeaway is that when it comes to another rate hike, the chair still very much has his finger on the trigger, even if it's a bit less itchy than it was last year," said Inflation Insights' Omair Sharif.

Watch | PM Modi, Xi Jinping discuss border issues in Johannesburg

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It was difficult, Powell said, to know with precision the degree to which the Fed's current 5.25% to 5.5% benchmark interest rate had cleared the "neutral" rate of interest needed to slow the economy, and therefore hard to assess just where policy stands.

Powell repeated what has become a standard Fed diagnosis of inflation progress - with a pandemic-era jump in goods inflation easing and a decline in housing inflation "in the pipeline," but concern that continued consumer spending on a broad array of services and a tight labor market may make a return to 2% difficult.

Recent declines in measures of underlying inflation, stripped of food and energy prices, "were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably," Powell said.

"Given the size" of the broader services sector, excluding housing, "some further progress will be essential," the Fed chief said, and it will likely require an economic slowdown to deliver it.

"Restrictive monetary policy will likely play an increasingly important role. Getting inflation sustainably back down to 2% is expected to require a period of below-trend economic growth as well as some softening in labor market conditions," Powell said.

While Powell's tone was not as stern as last year, when in a very abrupt set of remarks he disabused market notions that the Fed was then nearing the end of its rate-hike cycle and would cut rates through this year. Still, it was clear he did not want to set aside any options.

“Powell continues to walk a tightrope," said Michael Arone, chief investment strategist at State Street Global Advisors. "This year I think he is demonstrating that he is pleased with how far monetary policy has come and how inflation has been reduced. But he is still holding on tightly to this notion that they are watching it carefully and they still have work to do.”

The Fed chair also indicated he is not open to entertaining a discussion about changing the Fed's 2% target for inflation as some economists have suggested may be warranted in an environment with growth that is persistently above trend.

"Two percent is and will remain our inflation target," Powell said. "We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time."

Powell ended his speech on Friday with nearly the same line he finished with last year at Jackson Hole: "We will keep at it until the job is done."

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&nbsp;

The Federal Reserve may need to raise interest rates further to ensure inflation is contained, Fed Chair Jerome Powell said on Friday, nodding both to easing price pressures and the surprising overperformance of the U.

The Federal Reserve may need to raise interest rates further to ensure inflation is contained, Fed Chair Jerome Powell said on Friday, nodding both to easing price pressures and the surprising overperformance of the U.S. economy and promising to move "carefully" at upcoming meetings. Powell said Fed policymakers would proceed with care as they "decide whether to tighten further," but also made clear that the central bank has not yet concluded that its benchmark interest rate is high enough to be sure that inflation returns to the 2% target. "It is the Fed’s job to bring inflation down to our 2% goal, and we will do so," Powell said in a keynote address to the Jackson Hole Economic Policy Symposium. "We have tightened policy significantly over the past year. Although inflation has moved down from its peak - a welcome development - it remains too high. We are prepared to raise rates further if appropriate, and intend to hold policy at a restrictive level until we are confident that inflation is moving sustainably down toward our objective." Also Read | With Prigozhin dead, Wagner group's bloodied past, tumultuous present & uncertain future In that context, recent data has raised a new concern, he said. "We are attentive to signs that the economy may not be cooling as expected," with consumer spending "especially robust" and the housing sector possibly rebounding, Powell said. The economy continues to grow above trend, Powell said, and if that continues "it could put further progress on inflation at risk and could warrant further tightening of monetary policy." His remarks showed the Fed wrestling with conflicting signals from an economy where inflation has by some readings slowed a lot without much cost to the economy - a good outcome, but one that has raised the possibility that Fed policy is not restrictive enough to complete the job. Also Read | Greek wildfires are worst in Europe in years, says EU-backed climate service Unlike in last year's speech at the closely watched annual conference hosted by the Federal Reserve Bank of Kansas City - a terse warning of more tightening to come - Powell did not warn households of coming "pain" from further policy tightening. But neither did he signal that rate cuts were anywhere close, or nod as some policymakers have done to the need to adjust rates downward once inflation cools more sustainably. Finger on the trigger Markets reacted by continuing to price in only a modest chance of a rate hike next month - less than 20%, based on rate futures pricing - but an increasing likelihood of a rate hike at one of the Fed's following two meetings - on Oct. 31-Nov. 1 and Dec. 12-13 - with prices indicating a better-than-50% chance of the policy rate ending the year in a 5.5%-5.75% range. "My main takeaway is that when it comes to another rate hike, the chair still very much has his finger on the trigger, even if it's a bit less itchy than it was last year," said Inflation Insights' Omair Sharif. Watch | PM Modi, Xi Jinping discuss border issues in Johannesburg × It was difficult, Powell said, to know with precision the degree to which the Fed's current 5.25% to 5.5% benchmark interest rate had cleared the "neutral" rate of interest needed to slow the economy, and therefore hard to assess just where policy stands. Powell repeated what has become a standard Fed diagnosis of inflation progress - with a pandemic-era jump in goods inflation easing and a decline in housing inflation "in the pipeline," but concern that continued consumer spending on a broad array of services and a tight labor market may make a return to 2% difficult. Recent declines in measures of underlying inflation, stripped of food and energy prices, "were welcome, but two months of good data are only the beginning of what it will take to build confidence that inflation is moving down sustainably," Powell said. "Given the size" of the broader services sector, excluding housing, "some further progress will be essential," the Fed chief said, and it will likely require an economic slowdown to deliver it. "Restrictive monetary policy will likely play an increasingly important role. Getting inflation sustainably back down to 2% is expected to require a period of below-trend economic growth as well as some softening in labor market conditions," Powell said. While Powell's tone was not as stern as last year, when in a very abrupt set of remarks he disabused market notions that the Fed was then nearing the end of its rate-hike cycle and would cut rates through this year. Still, it was clear he did not want to set aside any options. “Powell continues to walk a tightrope," said Michael Arone, chief investment strategist at State Street Global Advisors. "This year I think he is demonstrating that he is pleased with how far monetary policy has come and how inflation has been reduced. But he is still holding on tightly to this notion that they are watching it carefully and they still have work to do.” The Fed chair also indicated he is not open to entertaining a discussion about changing the Fed's 2% target for inflation as some economists have suggested may be warranted in an environment with growth that is persistently above trend. "Two percent is and will remain our inflation target," Powell said. "We are committed to achieving and sustaining a stance of monetary policy that is sufficiently restrictive to bring inflation down to that level over time." Powell ended his speech on Friday with nearly the same line he finished with last year at Jackson Hole: "We will keep at it until the job is done." WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. ×

Fed's Powell says higher rates may be needed, will move 'carefully'

U.S. banks have tightened their lending standards for both businesses and households in the second quarter of 2023, and they anticipate maintaining this cautious approach for the rest of the year, according to a survey conducted by the Federal Reserve and cited by Bloomberg. The survey of loan officers revealed a multitude of reasons behind this tightening, including a volatile economic outlook, declining credit quality in loan portfolios, concerns about bank funding costs, and deposit outflows.

Federal Reserve Chairman Jerome Powell commented on the survey, acknowledging that the overall lending conditions are tight and continue to tighten. As a result of these conditions, the Fed took decisive action by raising interest rates to their highest level since March 2001.

Factors at play

Among the factors contributing to the banks' increased caution are worries about the potential impact of legislative, supervisory, or accounting changes. Recently, the Federal Reserve and other regulators proposed a 16 per cent aggregate increase in capital requirements for banks with assets exceeding $100 billion, aiming to strengthen lenders against potential future challenges.

In response to the impending regulatory changes, some banks are already taking preventive measures, pulling back on lending or issuing warnings about potential future restrictions. The survey also revealed a decline in demand for new loans across various categories, affecting consumers, businesses, and commercial and residential real estate sectors.

Throughout the year, growth in U.S. bank lending has slowed, coinciding with the Federal Reserve's aggressive campaign to combat inflation by raising interest rates and subsequently increasing borrowing costs. As a result, banks are setting aside more funds for future loan losses, signifying their apprehension about worsening credit conditions.

Loan demand outlook in focus

Despite the tightening lending landscape, JPMorgan Chase's Chief Financial Officer, Jeremy Barnum, expressed optimism about reasonably robust loan card growth, particularly in auto loans. However, he also stated that the outlook for loan demand in other areas, including consumer and wealth sectors, is not as promising.

Slower bank lending can serve as a potential recession indicator, though it is not always definitive. According to Apollo's Chief Economist, Torsten Slok, the 'maximum negative impact' of tighter credit conditions on the gross domestic product (GDP) can take up to a year and a half to materialise.

While the possibility of a recession was a concern, the latest data from the Bureau of Labour Statistics has shown that the U.S. economy grew faster in the second quarter compared to the first. As a result, the growing consensus suggests that the immediate threat of a recession is diminishing.

Federal Reserve Chairman Jerome Powell echoed this sentiment, stating that the strong economic performance has instilled confidence in the country's economic outlook. Despite this optimism, the cautious approach taken by banks toward lending underscores the ongoing uncertainty surrounding the economic landscape.

(With Inputs from Agencies)

U.S. banks have tightened their lending standards for both businesses and households in the second quarter of 2023, and they anticipate maintaining this cautious approach for the rest of the year, according to a survey conducted by the Federal Reserve and cited by Bloomberg.

U.S. banks have tightened their lending standards for both businesses and households in the second quarter of 2023, and they anticipate maintaining this cautious approach for the rest of the year, according to a survey conducted by the Federal Reserve and cited by Bloomberg. The survey of loan officers revealed a multitude of reasons behind this tightening, including a volatile economic outlook, declining credit quality in loan portfolios, concerns about bank funding costs, and deposit outflows. Federal Reserve Chairman Jerome Powell commented on the survey, acknowledging that the overall lending conditions are tight and continue to tighten. As a result of these conditions, the Fed took decisive action by raising interest rates to their highest level since March 2001. Factors at play Among the factors contributing to the banks' increased caution are worries about the potential impact of legislative, supervisory, or accounting changes. Recently, the Federal Reserve and other regulators proposed a 16 per cent aggregate increase in capital requirements for banks with assets exceeding $100 billion, aiming to strengthen lenders against potential future challenges. In response to the impending regulatory changes, some banks are already taking preventive measures, pulling back on lending or issuing warnings about potential future restrictions. The survey also revealed a decline in demand for new loans across various categories, affecting consumers, businesses, and commercial and residential real estate sectors. Throughout the year, growth in U.S. bank lending has slowed, coinciding with the Federal Reserve's aggressive campaign to combat inflation by raising interest rates and subsequently increasing borrowing costs. As a result, banks are setting aside more funds for future loan losses, signifying their apprehension about worsening credit conditions. Loan demand outlook in focus Despite the tightening lending landscape, JPMorgan Chase's Chief Financial Officer, Jeremy Barnum, expressed optimism about reasonably robust loan card growth, particularly in auto loans. However, he also stated that the outlook for loan demand in other areas, including consumer and wealth sectors, is not as promising. Slower bank lending can serve as a potential recession indicator, though it is not always definitive. According to Apollo's Chief Economist, Torsten Slok, the 'maximum negative impact' of tighter credit conditions on the gross domestic product (GDP) can take up to a year and a half to materialise. While the possibility of a recession was a concern, the latest data from the Bureau of Labour Statistics has shown that the U.S. economy grew faster in the second quarter compared to the first. As a result, the growing consensus suggests that the immediate threat of a recession is diminishing. Federal Reserve Chairman Jerome Powell echoed this sentiment, stating that the strong economic performance has instilled confidence in the country's economic outlook. Despite this optimism, the cautious approach taken by banks toward lending underscores the ongoing uncertainty surrounding the economic landscape. (With Inputs from Agencies)

Cash flow slowdown: U.S. banks turn cautious on lending in 2023

US Fed Chair Jerome Powell's speech at the Federal Reserve's annual forum has sent jitters to markets causing a crash. His announcement that interest rates would continue to rise and stay high cost America's richest people to lose close to 78 billion dollars.

FED Chief's speech causes markets to crash, Powell says more rate hikes to come

According to Federal Reserve head Jerome Powell, taming United States (US) inflation will cause "pain" to American families and businesses, but failing to force prices down from their current 40-year high would be even more harmful. Powell made the remarks in a highly-anticipated speech to international policymakers on Friday.&nbsp;

Powell did not hold back or leave any space for doubt when he spoke to the annual meeting of central bankers at Jackson Hole, Wyoming, promising to act "forcefully."&nbsp;

The strong US employment market will suffer as a result of the world's greatest economy possibly slowing for an extended period, he warned. He referred to these repercussions as the "unfortunate costs of reducing inflation."

This year, the Fed aggressively campaigned to raise interest rates, and Powell made it clear in his unusually brief and very forthright speech that the struggle against inflation is far from done.&nbsp;

In front of the breathtaking Grand Teton mountains, he said, "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance."&nbsp;

Inflation will be reduced by higher interest rates, slower growth, and softer labour market conditions, but Powell warned that this will hurt both households and companies.&nbsp;

Also Read:<a href="https://www.wionews.com/world/jihadist-ambush-on-gold-mine-vehicle-convoy-kills-seven-in-burkina-faso-510503">&nbsp;Jihadist ambush on gold mine vehicle convoy kills seven in Burkina Faso</a>

But failing to bring back price stability will cause even more suffering.

The US economy is showing modest indications of slowing down, and price pressures are lessening, which has given financial markets hope that the central bank may scale down its aggressive rate hikes and possibly start to reverse course next year.&nbsp;

Powell, however, put an end to expectations of a change in policy by emphasising that the Fed's monetary policy and the benchmark borrowing rate would need to stay "sufficiently restrictive" in order to bring inflation back down to the goal rate of 2 per cent.&nbsp;

The announcement caused a downturn in the US stock market, with all three major stock indices falling three per cent or more, with the Dow shedding 1,000 points.

(with inputs from agencies)

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According to Federal Reserve head Jerome Powell, taming United States (US) inflation will cause "pain" to American families and businesses, but failing to force prices down from their current 40-year high would be even more harmful.

According to Federal Reserve head Jerome Powell, taming United States (US) inflation will cause "pain" to American families and businesses, but failing to force prices down from their current 40-year high would be even more harmful. Powell made the remarks in a highly-anticipated speech to international policymakers on Friday. Powell did not hold back or leave any space for doubt when he spoke to the annual meeting of central bankers at Jackson Hole, Wyoming, promising to act "forcefully." The strong US employment market will suffer as a result of the world's greatest economy possibly slowing for an extended period, he warned. He referred to these repercussions as the "unfortunate costs of reducing inflation." This year, the Fed aggressively campaigned to raise interest rates, and Powell made it clear in his unusually brief and very forthright speech that the struggle against inflation is far from done. In front of the breathtaking Grand Teton mountains, he said, "Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance." Inflation will be reduced by higher interest rates, slower growth, and softer labour market conditions, but Powell warned that this will hurt both households and companies. Also Read: Jihadist ambush on gold mine vehicle convoy kills seven in Burkina Faso But failing to bring back price stability will cause even more suffering. The US economy is showing modest indications of slowing down, and price pressures are lessening, which has given financial markets hope that the central bank may scale down its aggressive rate hikes and possibly start to reverse course next year. Powell, however, put an end to expectations of a change in policy by emphasising that the Fed's monetary policy and the benchmark borrowing rate would need to stay "sufficiently restrictive" in order to bring inflation back down to the goal rate of 2 per cent. The announcement caused a downturn in the US stock market, with all three major stock indices falling three per cent or more, with the Dow shedding 1,000 points. (with inputs from agencies)

Fed's Powell says higher interest rates will bring down inflation, but also inflict 'pain' on Americans

General Colin L. Powell former U.S secretary of state and chairman of the joint chief of staff has passed away at the age of 84. According to the General's family, he passed away early Monday due to the complications of Covid 19.

U.S first black secretary of state General Colin L. Powell no more

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit.&nbsp;

Asked if he wants Powell to resign, Trump told reporters,&nbsp;"If he did, I wouldn't stop him."

Trump suggested earlier Friday that he regarded Powell as a bigger "enemy" than China, with whom he has been waging a trade war.

China announced Friday new tariffs on $75 billion in US products and President Donald Trump lashed out with threats of further retaliation, meaning the trade uncertainty that Powell said is exacerbating the global slowdown is unlikely to go away soon.

Trump lost no time in criticizing Powell -- and swiping at Beijing.

In a furious flurry of tweets, Trump attacked the Fed's stewardship of the world's biggest economy and vowed a quick response to China.

"As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed," Trump tweeted after Powell's comments.

"My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?" Trump said, misspelling the Fed chief's name in an unprecedented attack on the independent central bank.

The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy.

But in his hotly anticipated speech to an annual central banking conference in Jackson Hole, Wyoming, Powell cautioned that the Fed has no "rulebook" for dealing with the trade war fallout.

"The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China," he said.

"The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States."

While Powell said the US economy "is now in a favorable place," it faces "significant risks" and he again pledged that the Fed "will act as appropriate to sustain the expansion."&nbsp;

However, he warned that there is no "settled rulebook for international trade ... no recent precedents to guide any policy response to the current situation."

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit. Asked if he wants Powell to resign, Trump told reporters, "If he did, I wouldn't stop him.

US President Donald Trump said Friday that he would not stand in the way of beleaguered Federal Reserve chief Jerome Powell if he decided to quit. Asked if he wants Powell to resign, Trump told reporters, "If he did, I wouldn't stop him." Trump suggested earlier Friday that he regarded Powell as a bigger "enemy" than China, with whom he has been waging a trade war. China announced Friday new tariffs on $75 billion in US products and President Donald Trump lashed out with threats of further retaliation, meaning the trade uncertainty that Powell said is exacerbating the global slowdown is unlikely to go away soon. Trump lost no time in criticizing Powell -- and swiping at Beijing. In a furious flurry of tweets, Trump attacked the Fed's stewardship of the world's biggest economy and vowed a quick response to China. "As usual, the Fed did NOTHING! It is incredible that they can 'speak' without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed," Trump tweeted after Powell's comments. "My only question is, who is our bigger enemy, Jay Powel or Chairman Xi?" Trump said, misspelling the Fed chief's name in an unprecedented attack on the independent central bank. The Fed cut the benchmark interest rate last month for the first time in more than a decade, partly as insurance against the impact of trade uncertainties on the economy. But in his hotly anticipated speech to an annual central banking conference in Jackson Hole, Wyoming, Powell cautioned that the Fed has no "rulebook" for dealing with the trade war fallout. "The three weeks since our July FOMC meeting have been eventful, beginning with the announcement of new tariffs on imports from China," he said. "The global growth outlook has been deteriorating since the middle of last year. Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States." While Powell said the US economy "is now in a favorable place," it faces "significant risks" and he again pledged that the Fed "will act as appropriate to sustain the expansion." However, he warned that there is no "settled rulebook for international trade ... no recent precedents to guide any policy response to the current situation."

Trump says he  'wouldn't stop' if beleaguered Federal Reserve chief Jerome Powell decides to quit 

Gold&nbsp;surged&nbsp;2 per cent on&nbsp;Friday as investors interpreted <a href="https://www.wionews.com/business-economy/oil-prices-eke-out-small-gains-ahead-of-federal-reserve-chair-jerome-powell-speech-244921">US Federal Reserve Chair Jerome&nbsp;Powell</a>'s&nbsp;speech&nbsp;as leaning toward a dovish monetary policy stance and President Donald&nbsp;Trump's latest comments exacerbated trade tensions with China.

Spot&nbsp;gold&nbsp;rose 1.9per cent at $1,526.60 an ounce by 14:08 pm EDT (1801 GMT), shaking off slight headwinds ahead of the Fed Chair's&nbsp;speech.

Prices earlier rose to $1,528.79, the highest since August&nbsp;13, when spot&nbsp;gold&nbsp;had scaled a six-year peak of $1,534.31.

US&nbsp;gold&nbsp;futures settled up 1.9per cent to $1,537.60.

"The fact that he (Powell) said that they (the Fed) will act appropriately to sustain expansion is pretty bullish for&nbsp;gold. The two primary tools they have are quantitative easing (QE) or lower rates - both those tools will cause&nbsp;gold&nbsp;to go higher," said Bob Haberkorn, senior market strategist at RJO Futures.

"The move this morning is just more people buying&nbsp;gold&nbsp;simply with the expectations that interest rates will be lower by year-end."

Powell&nbsp;said the US economy is in a "favourable place," but gave few clues about interest rate cuts at its next meeting.

However, he listed a series of economic and geopolitical risks the Fed is monitoring, noting these were linked to the trade spat.

"We shouldn't be surprised if we see the <a href="https://www.wionews.com/business-economy/fedex-offers-cautious-2020-outlook-as-ceo-slams-united-states-china-on-trade-230487">Fed deliver a full percentage point</a> in rate cuts over the next 12 months and a new QE program as we may only need a couple of the following macro events to blow up: trade uncertainties, weakness in China and Germany, Brexit, Hong Kong, and the dissolution of the Italian government," Edward Moya, a senior market analyst at OANDA, said in a note.

Powell's&nbsp;speech&nbsp;prompted a backlash from&nbsp;Trump&nbsp;on Twitter, asking whether the Fed chair was a greater "enemy" than China's leader Xi Jinping.

Trump&nbsp;also ratcheted up the rhetoric on China, ordering US companies to look at ways to close operations in the country, which sent equities tumbling and drove further inflows into safe-haven&nbsp;gold.

This came&nbsp;after&nbsp;China unveiled retaliatory tariffs against about $75 billion worth of US&nbsp;goods.

"This means there is no resolution, the escalation continues. Investors are selling the risk and buying&nbsp;gold," said SP Angel analyst Sergey Raevskiy.

Gold&nbsp;has risen nearly 8 per cent so far this month and about 19per cent this year and was set for a fourth straight week of gains.

Elsewhere, silver gained 2.3per cent to $17.39 an ounce, while platinum was up 0.1per cent at $858.11.

Palladium fell 1.7per cent to $1,461.83 an ounce, but the autocatalyst metal remained on track for a third straight weekly gain of about 0.9

Gold surged 2 per cent on Friday as investors interpreted US Federal Reserve Chair Jerome Powell's speech as leaning toward a dovish monetary policy stance and President Donald Trump's latest comments exacerbated trade tensions with China.

Gold surged 2 per cent on Friday as investors interpreted US Federal Reserve Chair Jerome Powell's speech as leaning toward a dovish monetary policy stance and President Donald Trump's latest comments exacerbated trade tensions with China. Spot gold rose 1.9per cent at $1,526.60 an ounce by 14:08 pm EDT (1801 GMT), shaking off slight headwinds ahead of the Fed Chair's speech. Prices earlier rose to $1,528.79, the highest since August 13, when spot gold had scaled a six-year peak of $1,534.31. US gold futures settled up 1.9per cent to $1,537.60. "The fact that he (Powell) said that they (the Fed) will act appropriately to sustain expansion is pretty bullish for gold. The two primary tools they have are quantitative easing (QE) or lower rates - both those tools will cause gold to go higher," said Bob Haberkorn, senior market strategist at RJO Futures. "The move this morning is just more people buying gold simply with the expectations that interest rates will be lower by year-end." Powell said the US economy is in a "favourable place," but gave few clues about interest rate cuts at its next meeting. However, he listed a series of economic and geopolitical risks the Fed is monitoring, noting these were linked to the trade spat. "We shouldn't be surprised if we see the Fed deliver a full percentage point in rate cuts over the next 12 months and a new QE program as we may only need a couple of the following macro events to blow up: trade uncertainties, weakness in China and Germany, Brexit, Hong Kong, and the dissolution of the Italian government," Edward Moya, a senior market analyst at OANDA, said in a note. Powell's speech prompted a backlash from Trump on Twitter, asking whether the Fed chair was a greater "enemy" than China's leader Xi Jinping. Trump also ratcheted up the rhetoric on China, ordering US companies to look at ways to close operations in the country, which sent equities tumbling and drove further inflows into safe-haven gold. This came after China unveiled retaliatory tariffs against about $75 billion worth of US goods. "This means there is no resolution, the escalation continues. Investors are selling the risk and buying gold," said SP Angel analyst Sergey Raevskiy. Gold has risen nearly 8 per cent so far this month and about 19per cent this year and was set for a fourth straight week of gains. Elsewhere, silver gained 2.3per cent to $17.39 an ounce, while platinum was up 0.1per cent at $858.11. Palladium fell 1.7per cent to $1,461.83 an ounce, but the autocatalyst metal remained on track for a third straight weekly gain of about 0.9

Gold soars 2% after US Federal Reserve Chair Jerome Powell speech, Trump tweets

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