The U.S. economy twofold at a modest rate through the final six weeks of 2019; however, uncertainty over U.S. trade coverage continued to hurt companies, a survey conducted by the Federal Reserve stated Wednesday.
U.S. Prez Trump and Chinese VP Liu He inked an interim trade deal on the White House earlier Wednesday after 18 months of tit-for-tat tariffs between the world’s two most significant economies that have uprooted supply chains and slowed global progress.
The Fed cut rates of interest three times last year, reversing course after three years of periodic rate hikes.
Federal Chairperson Jerome Powell characterized the rate cuts as insurance against slowing global development, the trade tensions, and moderate inflation in order to preserve the longest economic growth on record going.
Federal policymakers have since made plain they intend to keep rates of interest steady for the foreseeable future, citing a trigger to the economy from last year’s cuts and the easing of strains in the U.S.-China trade battle.
However, Fed policymakers have warned the partial trade agreement won’t eliminate companies’ concerns as U.S. duties on China are set to remain in place until a “Second Phase” agreement is signed.
The latest Fed snapshot of the economy confirmed that before the deal was inked, many districts had been nonetheless suffering. The Richmond Fed stated that many manufacturers in its district cited the trade spats as a major worry.
Elsewhere in the report, inflation pressures remained relatively subdued, with prices rising at a modest rate. Wage growth was described as modest to moderate in most districts despite an unemployment pace near a 50-year-low and companies reporting extensive labor shortages.