Fed's Powell: Uncertainty in business investment due to trade policy

Fed's Powell: Uncertainty in business investment due to trade policy



I wanted to examine a little more closely some of the things you talked about the consumer side looking strong the business side weakening and I want to compare that and ask you what are some of the triggers to the weakening on the business side as I look at the the chart trade policy uncertainty you said it's no question uncertainty is elevated what would greater certainty look like what are some of the things creating the uncertainty what would greater certainty look like and then what would the impact be on the economy so we think that the the place where uncertainties showing up is in business investment businesses make investments in those have to work for a longer period of time when businesses has become uncertainty about the uncertain about the future and about future demand they may hold off they may decide to wait before they build something or buy something and they may they may just hold off so what we're seeing is business fixed investment which was quite strong business investment was very strong right through 17 and most of 18 it's really slowed down now in the middle of the year and we do connect that there's no there's no perfect way to identify these things but we do connect that to trade policy uncertainty and also uncertainty about global growth and weak weak manufacturing around the world what's specifically in trade policy do you think is connected to that pulling back on investment it's it I think it's some it's just there have been trading you know the people who are responsible for trade and that's not us we you know we don't criticize them for what they do or we have a broad series of trade discussions going on if you if you're a manufacturing company in our economy of any size the chances are pretty good that your supply chain goes across national borders to Canada or Mexico or China or Vietnam or someplace and that supply chain is really part of the way you do business and you just assume that it's working and you can focus on your clients when the supply chain is called into question it and we hear this a lot from businesses by the way it's called in a question you you pull back and you you know you don't you have less certainty about how this is gonna work you may have to change it many companies have changed their supply chain away from China now but because it has not changed it had changed it had moved to Mexico or Vietnam and now so I just think that uncertainty is is something that we call it for the economy but again I wouldn't want to suggest that that in any way is a criticism of those who are conducting the policy we don't have a responsibility for evaluating that that's for them I understand and appreciate your independence there I'm hearing the same thing on the ground from my businesses in Montgomery and Burks counties Pennsylvania the uncertainty the fickle trade policy the fickle tariff policy the punitive tariff policy is driving their conservatism in their own areas let me shift to something else that you talked about and and I'm I care deeply about gun violence the opioid crisis and I'm wondering through your complex lens could you talk about the opioid crisis and/or gun violence one of the recent reports on gun violence says that gun violence in this country costs our economy somewhere in the area of 230 billion dollars a year and I know you you are not involved in gun policy or the opioid crisis policy but through your lens and through your the tools that you're using what are you seeing what could we in Congress learn about how we could minimize reduce that economic impact I can probably do a little better talk about opioids where there's been some great research including by the late labor economist Alan Krueger who sadly passed away last year or maybe earlier this year about the effect of the opioid crisis so an extraordinary if you take the prime age men in certain age groups who are out of the labor force an extraordinary percentage of them I think the number was 44% are taking some kind of painkiller so it's a big number it's it's a big number of people that are on opioids and for the most part missing from the labor force we all want you know the US economy to grow faster and be larger and we want prosperity to be broadly shared here are people who are in the prime working years who are on opioids and it's a national crisis and I know people are working on it but it's it's out there and it's it's it's just there's a human tragedy but there's also an economic motivation to get these people into the labor force where they can lead healthy lives you you

3 thoughts on “Fed's Powell: Uncertainty in business investment due to trade policy”

  1. Chairman dumbass thinks rate cuts will provide more business investment outside of exponentially more cheap debt backed corporate buybacks of shares of stock.

  2. Why does everyboody else know that it's 100% certain the chinese econoomy is collapsing?
    How much cover up can we expect from the epstein/clinton pedofile investigations?

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