WASHINGTON – Federal Reserve Chairman Jerome Powell signaled Wednesday that the central bank’s Federal Open Market Committee may soon vote to cut interest rates in response to growing economic uncertainty.
“In our June meeting mission statement, we indicated that, in light of increased uncertainties about the economic outlook and muted inflation pressures, we would closely monitor the implications of incoming information for the economic outlook and would act as appropriate to sustain the expansion,” Powell told the House Financial Services Committee.
He added: “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened.”
Powell said the overall health of the U.S. economy is strong, noting that the labor market “remains healthy” and that the national unemployment rate is “close to its lowest level in 50 years.”
At its June meeting, the Fed voted to keep its federal funds rate at 2-1/4 to 2-1/2%. That rate has remained constant since January.
The Fed made four modest rate adjustments in 2018.
The committee is scheduled to hold its next meeting July 30-31.
President Donald Trump has consistently pressured Powell to lower interest rates. Trump has blamed the Fed for the economy not climbing by 4% GDP last year. The economy grew at 3.1% in 2018.
Trump has dismissed reports that say he is looking to replace Powell.
U.S. stocks soared on Wednesday morning after Powell’s opening statement to the committee was posted online.
Around the time U.S. markets opened at 9:30 a.m. EDT., the S&P 500 index briefly surpassed 3,000 for the first time in history.
As of 11 a.m. EDT. the Dow Jones Industrial Average was up nearly 80 points.