Powell promises to “stand” economic expansion

The U.S. dollar was flat on Friday after Federal Reserve Chairman Jerome Powell said the central bank would keep an eye on the economy and act as needed, but failed to give any new guidance on interest rates.

“We will act as appropriate to sustain the expansion,” Powell said in prepared remarks at the Fed’s Jackson Hole, Wyom. summit. The economy is in a “favorable place” he said, but the trade war puts it in a “complex, turbulent” situation. The central bank is at an unprecedented place as it tries to set monetary policy to help the economy overcome the tensions caused by the U.S.-China trade war.

The slowdown has been visible for months in China, Japan and Europe, and is just starting to reach U.S. manufacturing with the IHS Markit purchasing managers indexof activity dropping below 50 for the first time in nearly 10 years in August.

Still, domestic economic strength continues, with inflation nearing 2% and and the job market at historically strong levels.

Powell seemed to push back against pressure to cut rates aggressively. U.S. President Donald Trump has called for a full percentage point cut and markets expect the central bank to keep easing its monetary policy.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, inched up 0.1% to 98.132 as of 10:15 AM ET (14:15 GMT).forex.com

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