The Federal Reserve is widely expected to cut interest rates Wednesday for only the second time since the Great Recession, but analysts say the move may not be enough to offset the economic damage caused by the trade war with China.
Financial markets will be watching for an anticipated quarter-percentage-point cut — and listening for what Federal Reserve Chairman Jerome Powell has to say about it.
“Powell just has to be very clear that [the Fed is] going to do whatever it takes to sustain the expansion,” said Kathy Bostjancic, chief U.S. financial economist at Oxford Economics.
Powell has already been trying to send that message.
“Uncertainty around trade policy is causing some companies to hold back now on investment,” he told an audience in Switzerland this month. “So our obligation is to use our tools to support the economy, and that’s what we’ll continue to do.”