Current trade war has so far negatively affected the US economy because the US government managed to create less number of jobs in the last few months. The chances of inflation are rising, and many economists are saying that the country might get into another great recession. Fed’s chairman Jeremy Powell on the other hand, does not think that way. President Trump and Fed doesn’t share the same understanding when it comes to economic policies. Trump demanded the support from the Fed since the start of a trade war, and many times they refused to provide it.
However, now things might be changing because Fed’s chairman Jeremy Powell has decided to give another interest cuts. In the last quarter’s month, the Fed said that they would be reducing the rate of interest since the country’s economy is slowing down. However, in a recent meeting, Powell gave a signal of another cut of interest rates. Jeremy mentioned the Fed’s position to do anything to maintain a good US economy during the hard times. Jeremy Powell thinks the US economy is favorable even though many are not looking at it from such a point of view.
Investors are already expecting a cut in interest since recently for the first time in the last decade; Feds did that. The pressure from Trump was continuously rising on fed for cutting rates, and that bitter battle between them has investors in a dilemma. Economists are predicting that if the situation like grade war, the country’s internal economic policies goes on the same, then it would bring another recession. However, in the last month, the government managed to add 130000 jobs which are relatively slower, but it’s a clear impact of a trade war with China. However, it will be interesting to see how much interest rates this time fed is going to reduce