Fed's Bostic flags trade war's potential impact

Economy 7/13/2018, 7:34 PM
Fed's Bostic flags trade war's potential impact

A voting policymaker from the Federal Open Market Committee said on Friday at a town hall event in Northern Virginia that the effects of import tariffs in the United States should be monitored very closely. On the flipside, according to Raphael Bostic, research hasn't proven tax relief implemented by the administration of President Donald Trump has had effect on capital spending. The move was designed with the intention to stimulate corporate expenditure, while lately the support may have been offset by rising prices of oil.

The president of the Federal Reserve Bank of Atlanta still praised the economy's indicators, saying there are not many points of concern and claiming the inflation's rebound toward target 2% is a sign of health. He noted the outlook for interest rates could be altered depending on the speed of economic expansion compared to expectations. In any case, according to his remarks, unfavorable demographic trends are set to cap growth.

Bostic, a dovish voice on the rate-setting panel this year reiterated his view that three quarter-point increases would be appropriate for 2018 in total, but allowed the possibility an acceleration in activity could add another one.

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