Listen: Fed's Clarida says no need for rate cuts unless economy weakens
"Federal Reserve vice chairman Richard Clarita says the US economy is in a very good place. But that the central Bank would consider cutting short-term interest rates if the outlook for global growth durken's, the fed has been holding rates steady, so for this year, but one big factor, that's complicating the outlook, the trade battle between the US and China Wall Street Journal's Nick Tim rose explains. Fed officials last met a thirtieth and may first and at that meeting, they actually left the meeting feeling more confident about the economic outlook and that followed a pretty bumpy stretch earlier in the year that prompted them to drop any bias toward raising interest rates. So go back before that meeting stock markets were near all time highs. The unemployment rate is near a fifty year low wages arising solidly, but not so fast to 'cause fears of unwanted inflation. And in fact, at the. The may meeting fed chairman, Jay Powell pushed back against market expectations of a rate, cut this year by pointing to reasons why they thought of slowdown in inflation might be temporary. But that'll happen about five days before trade talks between Beijing and Washington, broke down that led President Trump to raise tariffs on roughly two hundred billion dollars in goods to twenty five percent from ten percent in that really represents a significant escalation intentions. So the question now is are we in a different world from where we were just a month ago? And if it looks like the economy is going to slow more than fed officials already expect that it will does that put him in a position where they feel like they need to act. Tim rose says, geopolitical risks are complicating the feds careful calculus. The more the geopolitical risk picture, darkens, the more, the fed is going to have to consider g how comfortable. Are we sitting on our hands right here for right now? They do seem pretty comfortable with where things are, but the bond market has been reacting in a pretty pronounced fashion in the past few days yields on the ten year treasury note are down to their lowest levels in more than a year, and that really reflects how bond investors think that this is going to cause weakness in the global economy, and that it could force the fed to cut interest rates, the fed holds its next policy meeting in June on the eighteenth and nineteenth"