Powell could help stiffen Congress’ spine on trade

Powell said nothing in his testimony this week to undermine that, and in fact said the economy was poised for several more years of growth.

The rand was a shade weaker on Wednesday morning, largely reflecting broad dollar strength, after US Federal Reserve Jerome Powell recommitted to raising interest rates, albeit at the gradual pace.

The US economy would be “especially vulnerable” because it would be the focus of retaliation in a tit-for-tat conflict, the Fund’s chief economist Maurice Obstfeld said.

Japan exports, imports, trade balance, Australia NAB business confidences, employment change, unemployment rate, Swiss imports, exports, trade balance, United Kingdom retail sales, Canada ADP employment change, and US initial jobless claims, Philadelphia Fed survey, leading indicator.

Markets’ attention is also on the start of the corporate earnings season, with Netflix disappointing analysts on growth in the number of its subscribers in data released late Monday still affecting markets. He gave an upbeat assessment of the economy’s prospects while citing rising trade tensions as a risk to the Fed’s optimistic outlook. That’s the first time core inflation reached the central bank’s 2% goal since 2012.

In Novermber 2017, Powell acknowledged that “in the long, long run, cryptocurrencies and things of that nature could matter”, adding that blockchain could be something that “may have significant applications in the wholesale payments part of the economy”. That’s because the Fed’s normal response to higher inflation is to raise interest rates, not lower them.

The Fed has been ahead of its peers in tightening monetary policy and is expected to have raised rates a total of four times in 2018 to tackle rising inflationary pressures.

For now, central bankers believe the American economy is robust enough to stay on course.

Republican Sen. Pat Toomey of Pennsylvania noted that Fed officials had reported a growing number of business contacts cutting back on investment spending because of growing uncertainty about trade.

The Trump administration is preparing yet another round of tariffs on Chinese goods worth $200 billion. “It’s hard to know how this is going to turn out”. “If that is where this goes, we don’t know where it would lead”. But he told Congress the effort could be challenging if higher tariffs push inflation up too sharply.

Countries that adopt protectionist measures have historically fared worse than nations with open trade policies and fewer barriers, Powell said.

“If China is slowing down, there will be consequences to global commodity consumption and that’s going to drag gold down as well”, said Richard Xu, a fund manager at China’s biggest gold exchange-traded fund, HuaAn Gold.

Both the European Union and Japan have been hit with new U.S. tariffs despite their long-standing alliances with Washington.