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After trade war progress, the Fed should cut interest rates, boost its QE holdings and lower the dollar's value to boost the US economy
The world may be turning a corner on the US-China trade war, but spare a thought for Federal Reserve chairman Jerome Powell. Deal or no deal on the trade front, Powell has a lot to juggle, considering President Donald Trump’s demands for lower interest rates while the slowing US economy needs new stimulus measures. It may be a bad idea submitting to political pressure to cut US rates, but the Fed can ill-afford to tinker at the monetary margins while the economy is treading water. Time is running out; the Fed has plenty of options but needs to use them fast. The Fed continues to fall short on what’s needed to get ... (full story)