On Wednesday, the 10th of July 2019, Federal Reserve Chairman Jerome Powell had paved the way for a first US interest rate cut in decades, adding that the US Central Bank would ‘act as appropriate’ in order to defend its 121-month-long economic expansion endangered by a global slowdown alongside trade disputes on multiple fronts.
Besides, in Wednesday’s (July 10th) testimony to a congressional committee, Fed’s Powell had also addressed to a broad-based global weakness casting shadows over US economic outlook in context of an almost one-year-long trade Sino-US trade spat, which believed to be contributing to a sharp plunge in global economy and heightened recession risks.
Adding that a majority of global economic leaders had been failing to cope up with growing risks of trade frictions and contemplating policy easing as countermeasure, head of US Central bank said, “Though the U.S. government reported strong job growth for June, other major economies’ data have continued to disappoint.
That is very broad across Europe and around Asia, and that continues to weigh. Manufacturing, trade and investment are weak all around the world ... We have agreed to begin (trade) discussions again with China, and that is a constructive step.
It doesn’t remove the uncertainty”. In point of fact, financial markets all over the world had cheered over Fed’s Powell’s comment, while S&P had hit 3,000 level for the first time in Wall St.’s history and Nasdaq had been well on course to breach 8,000 level, during midday US trading hours on Wednesday (July 10th).