Fed Officials Voice Concern About Slowdown's Effect on Hiring [View all]
Source: New York Times
WASHINGTON — Several Federal Reserve policymakers, at their most recent meeting, voiced concern that weaker business activity and investment could lead to slower hiring and consumer spending, according to minutes of the meeting published on Wednesday. The Fed cut interest rates for a second time this year at that meeting, in mid-September, after a reduction in July that was its first since the Great Recession. The moves are meant to insulate the economy from major fallout as trade tensions stoke uncertainty and a global slowdown bleeds into American factories.
Policymakers at the September meeting expected the economy to continue growing steadily with the help of their rate cuts, the minutes showed. But they were increasingly worried about risks to that outlook from President Trump’s trade war, the threat of a chaotic British exit from the European Union and protests in Hong Kong.
“Participants generally had become more concerned about risks associated with trade tensions and adverse developments in the geopolitical and global economic spheres,” according to the minutes. “Several participants mentioned that uncertainties in the business outlook and sustained weak investment could eventually lead to slower hiring, which, in turn, could damp the growth of income and consumption.”
The Federal Reserve has two main tasks: promoting maximum employment and maintaining stable inflation, which it defines as 2 percent annual price gains. To achieve those goals, policymakers adjust interest rates to try to keep the economy growing at a steady and sustainable pace. The policy-setting Federal Open Market Committee has become increasingly divided over how to achieve those objectives. That is because the economy’s prospects have been clouded by the trade war and other uncertainties even as consumer spending and job growth have held up.
Read more: https://www.nytimes.com/2019/10/09/business/economy/federal-reserve-minutes.html
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