The US economy remains on track for growth despite the trade conflict with China, according to the US Federal Reserve (Fed). However, the economic contacts surveyed by the central bank were concerned that the tariff dispute could affect business activity, the Fed said in its yesterday’s „Beige Book“ economic report.
The growth rate of the economy had turned out to be „moderate“ from April to mid-May, it continues. In some of the twelve Fed districts, however, there was evidence of a slowing activity. The outlook for the coming months is positive, but moderate. The „Beige Book“ summarizes signals from the economy that may also be important for the monetary policy of the Fed.
Willingness to cut interest rates
With the tensions in US trade disputes mounting, the US Federal Reserve is ready to bolster the economy with a rate cut. Influential director Lael Brainard told the network portal Yahoo Finance that currency watchdogs are prepared to adjust monetary policy as needed to support growth. Even if the economy is running smoothly, commercial policy poses risks for the economy.
The key rate is currently in a range of 2.25 to 2.5 percent. The Fed had raised it several times in 2018 because of the booming economy. In the face of the trade dispute and the weaker global economy, the monetary authorities drove on sight this year and so far did not touch the key phrase.
