On the issue of economic growth, Democratic lawmakers asked Powell about the root causes of income inequality, to which he said access to education has stagnated compared to other nations. The central bank has dimmed its outlook this year on the back of slowing growth, below-target inflation, and trade tensions. As the economy recovered the central bank began slowly raising rates.
European shares were set to snap four days of losses on Thursday, after U.S. Federal Reserve Chair Jerome Powell's dovish comments cemented hopes of an interest rate cut this month, even as trade frictions between France and the United States rose.
Powell's statement emphasizing that current trade conditions and muted economic activity are dampening the US economy's outlook had a sanguine effect on the market. "These concerns may have contributed to the drop in business confidence". But the economy is likely slowing. "Inflation pressures remain muted", he added.
With that, Powell strongly hinted that a rate cut is coming down the line later this month.
France adopts controversial tech tax, despite US disapproval
The new tax is expected to raise €400m ($450 million) for the French government in 2019, after which the corpus will grow. Most tech giants have offices in countries like Ireland or Luxembourg, where low tax regimes prevail.
In testimony before the Senate banking committee on Thursday, Powell pointed to the U.S.
Essentially, it reinforced the market's strong expectations that the Fed will cut America's interest rates at the end of this month.
The FOMC minutes were published at the same time and most of the members thought that rising risks from global concern and flagging business confidence supported a rate cut, but that such a cut would "risk financial imbalances". "He's not doing that".
"You would not pack up and you would not leave?" the California Democrat repeated.
While the Fed does not want to stand in the way of financial innovation, Powell said a top concern is there appears to be no obvious regulatory agency in place to take the lead in oversight of the project. Trump attacked the Fed when it increased rates four times past year, arguing they dampened US economic growth and depressed the stock market.
Apple disables its walkie-talkie Watch app due to vulnerability
Apparently, the flaw could have allowed a skilled enough hacker to "listen through another customer's iPhone without consent". It looks like a serious security flaw has caused Apple to disable the walkie-talkie function on their Apple Watch.
"They raised rates too soon, too often, & tightened, while others did just the opposite", Trump wrote in a tweet. "But over the last decade, the Federal Reserve has been banging the inflation beehive with a baseball bat and the bees haven't come out, so they figure keep trying this until something happens".
Traders priced a 100 percent probability of a Fed rate cut in July, said the CME Group's FedWatch tool. Oxford Economics analyst Kathy Bostjanic said she expects a quarter-point cut at the July meeting, and another in September.
But the ongoing trade wars and signs of trouble in markets outside the U.S. appear to have convinced more Fed members that there is now a case for cutting rates.
But the plan has already prompted calls in Europe for close regulatory scrutiny and several U.S. lawmakers have said they need more information from Facebook. But almost all now foresee only a quarter-point move.
Trump said to be giving up fight on citizenship question
The court's decision does leave open the possibility for the administration to make another case for the question. Attorneys defending the administration, however, will be coming from a new team of Justice Department lawyers.