From Solid to Moderate

By Isaac Cohen*

                  The central bank of the United States, known as the Federal Reserve, decided to leave interest rates unchanged, despite its recognition that “economic activity is rising at a moderate rate,” instead of the “solid” pace recognized in the previous statement.

https://www.federalreserve.gov/newsevents/pressreleases/monetary20190619a.htm

                  According to Federal Reserve Chairman Jerome Powell, “risks seem to have grown,” mainly due to “trade developments and concerns about global growth.” In these conditions, “the committee felt that the right thing to do was to wait and see.” Hence, for the time being, the central bank did not respond to the clamor emanating from the White House for lower interest rates to stimulate the economy.

                  Actually, the protectionist commercial policy practiced by the White House is one of the main factors contributing to the slowdown in job creation and in manufacturing, together with less investment, due to a loss of confidence and increased market volatility.

                   For this reason, now that President Donald Trump has proclaimed his intention to seek the reelection, the White House has it in its hands to lengthen the longest economic expansion in US history. It only has to stop using tariffs (taxes) for “security reasons,” against allies and adversaries, or to control immigration. The return to a free trade policy, one of the traditional pillars of the Republican Party platform, could thus become the main economic stimulus.      

   *International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: [email protected]

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