A rate cut can be expected soon due to the economic turmoil across the globe, says Powell.
The trade war has caused a lot of financial upheavals which has slowed down growth in many countries. Interest rates have to be cut to save the economy, said, President Trump
The Fed Reserve is the most powerful bank in the U.S. After Janet Yellen stepped down from heading the bank, the American President appointed Powell to the post. Powell who was an investor banker succeeded Yellen in 2017.
President Trump had asked the Fed to lower interest rates to save the economy. But the Fed had increased interest rates four times in 2018. The Fed has said that interest rates were made to prevent inflation.
He had intended to raise interest rates steadily this year. But trade tensions have weighed on the economic outlook in the U.S.
On Wednesday, Powell had said that the global turmoil required a stimulus through a rate cut which is coming. The rate cut is in line with the demands of the president.
The tariffs imposed on China have been reiterated with tariff from China. This has impacted trade and investment in the U.S. and China. Countries across the globe have also been affected.
The stock market took a downturn towards the end of last year with the economic condition deteriorating in the economy.
In June, President Trump has said that he had the right to fire the Fed head and the right to demote him.
But the Fed chairman has said that he has a four-year term and he would not step down without serving the full term.
The Fed has been criticized by the president for not cutting interest rates. But on Wednesday, the Fed head had said that a rate cut is coming.
The S&P 500 has surged past 3,000 after the Fed had hinted on a rate cut.