New York/Helsinki — An agreement by the US and China to return to the negotiating table on trade is doing little to relieve pressure on the Federal Reserve to cut interest rates.
But the Fed, which signalled rate cuts could come soon in part because of uncertainty over the trade war, still faces a slowing global economy as well as businesses domestically putting off spending until China and the US reach a lasting truce. Markets are overwhelmingly betting the Fed’s next move will be its first rate cut since the global financial crisis a decade ago, and Trump has demanded easier policy to strengthen the economy and his hand at the negotiating table with Beijing.
Fed chairman Jerome Powell has repeatedly said the central bank makes decisions independent from pressure from both financial markets and the White House.