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JACKSON HOLE, Wyo. (CNN) — Federal Reserve chairman Jerome Powell on Friday acknowledged that the economy has grown more turbulent in the three weeks since the Fed cut rates for the first time in a decade -- but stopped short of giving any indication about what might be coming at the next rate-setting meeting in September.
"We are carefully watching developments as we assess their implications for the US outlook and the path of monetary policy," Powell said according to prepared remarks released ahead of an address at an annual economic symposium in Jackson Hole, Wyoming.
He reinforced his pledge that policymakers will continue to take "appropriate" steps to support the US economy's longest running expansion amid signs of a slowdown, while noting "significant risks" from a global slowdown and trade uncertainty.
Powell's highly anticipated remarks comes as Trump has dialed up his demands for the Fed to aggressively cut rates to shore up the US economy amid recession fears that could hurt his prospects of a re-election in 2020.
"As usual, the Fed did NOTHING! It is incredible that they can "speak" without knowing or asking what I am doing, which will be announced shortly. We have a very strong dollar and a very weak Fed," Trump tweeted 40 minutes after Powell took the stage at the economic conference in the tiny resort town.
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?," Trump continued, referring to the Chinese leader Xi Jinping.
On Friday, the Chinese government fulfilled its threat to take retaliatory action against the US by promising tariffs on US goods including oil, while also resuming its 25% tariff on US car imports. The move marked the latest escalation in a trade war that has subdued manufacturing and weakened capital spending by businesses.
In his speech, Powell described the last three weeks since the Fed meet in July as "eventful," running through a list of developments that have shuddered markets, including an escalation of tariffs in an ongoing trade war between the US and China, the growing possibility of a "hard Brexit," with the UK's departure from the European Union, and a global slowdown, most notably in Germany and China.
In recent months, the Fed has made clear that it is carefully considering trade uncertainty, a global growth slowdown and subdued inflation as it's sought to calibrate the right mix of policy in setting interest rates.
But Powell emphasized to a room of central bankers and economists that there's "no recent precedents" for the Fed to guide how policymakers should account for such trade policy uncertainty.
"Fitting trade uncertainty into this framework is a new challenge," said Powell, while noting its possible impact on the economy that could affect the central bank's rate- setting moves.
"In principle, anything that affects the outlook for employment and inflation could also affect the appropriate stance of monetary policy, and that could include uncertainty about trade policy," he said.
Even in this "challenging era," said Powell, the US economy is in a "favorable place," which he partly attributed to the Fed's decision to cut rates in July for the first time since the financial crisis of 2008.
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