White-hot panic about global trade may have eased a bit in recent weeks but the economic outlook is no easier to call for the US Federal Reserve as it prepares for a meeting on interest rates this week, reports BSS/AFP.
While the United States and China declared another truce and odds fell that Britain will crash out of the European Union, any improvements are as liable to be suddenly dashed as lead to success.
Amid the uncertainty, Fed policymakers appear ready to approve the third interest rate cut in a row as they grow more worried about the future, some daring even to use the dreaded word “recession.”
Fed Chairman Jerome Powell this month reiterated his pledge to do what it takes to keep the US economy afloat.
And his number two, Vice Chairman Richard Clarida, in a recent speech pointed to global growth estimates that “continue to be marked down.”
Both are signals more help is likely on the way. And while some economists question whether another move would be necessary or effective, the two-day meeting Tuesday and Wednesday is held amid increasing signs central bankers are on edge.
In a London speech, James Bullard, the St. Louis Fed’s aggressively dovish president, displayed a forecast chart bathed in red, reflecting more downward revisions to the growth projections for the United States, the euro area, Britain and China.
