Door open to US rate cut as Fed’s Powell flags uncertainties

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U.S. Federal Reserve Chairman Jerome Powell testifies before the House Financial Services Committee on the state of the U.S. economy, on Capitol Hill in Washington D.C., the United States, on July 10, 2019. (Xinhua/Liu Jie)

(AFP) – Federal Reserve Chair Jerome Powell on Wednesday left the door open to an interest rate cut this month, pointing to uncertainty about trade frictions and global growth.

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Mr Powell also was defiant in the face of a constant stream of criticism from President Donald Trump, saying the Fed pays no attention to such commentary and that he would not step down should Mr Trump try to fire him.

In remarks welcomed by Wall Street, Mr Powell said many central bankers believed the case for lower rates “had strengthened” last month given the rising “crosscurrents” in the economy.

In his highly-anticipated testimony to Congress, he repeatedly stressed the importance of keeping the US economy growing to ensure its benefits reach Americans left at the margins and said the central bank will deploy all its tools to support continued expansion.

Investors took this as a clear signal the Fed will cut its the benchmark lending rate at the next policy meeting July 30-31.

Early in the trading session, the broad-based S&P 500 stock index on Wednesday hit 3,000 for the first time before paring gains somewhat, while the Nasdaq, the home of major tech companies, finished at a record.

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