Fed Signals Economic Uncertainty; Interest Rate Cuts Could Follow

The Federal Reserve bank left the benchmark interest rate unchanged following a Wednesday meeting, but signaled that future cuts could be warranted.

During a news conference following the meeting, Fed chairman Jerome Powell stated that due to uncertainties in the economic outlook, the committee will “closely monitor” the economy and “act as appropriate to sustain the system.”

The central bank left the target range for the federal funds rate at 2.25 to 2.5 percent. Worrisome factors include the uncertainty in trade with China and others, as the Trump administration works through crafting and implementing new trade agreements. President Trump has previously argued that the Fed should cut rates, even considering removing Powell from his position.

Trade could improve, however, lessening the worry, as hopes are growing Trump and China’s President can resume negotiations next month starting with a meeting at the G20 Summit. Unchanged or lower interest rates may reduce worry in farm country, regarding the depressed farm economy, as well.