Fed semi-annual report: Trade uncertainty may be weighing on investment

Author: Adam Button | Category: Central Banks

Comments in the Fed monetary policy report:

  • Q2 data signal slower GDP growth on exports and inventories
  • US economic activity continued at a 'solid pace' in early 2019
  • Notes recent soft readings on inflation but says they appear to reflect transitory influences
The 'transitory' comment would be big if it came from Powell or a core Fed member. That's something they stopped saying about six weeks ago and it's odd that it appears in this report. That could be because this is more of a compendium. Or they could be trying to send a soft signal ahead of Powell next week.

More:
  • Repeats FOMC will 'act as appropriate' to sustain expansion
  • Signs of weaker credit standards on new leveraged loans
  • Labor market continued to strengthen, wage gains moderated
  • Business investment spending appears to have decelerated sharply this year
  • Consumer sentiment remains strong and borrowing conditions
  • US and global tariffs have been 'material' to slowdown in international trade
  • Data suggests 'moderation' in Q2 GDP due to weak business investment and a slowdown in global trade flows



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