Investing.com -- The Federal Reserve needs to stay flexible and attuned to risks to the broader world economy if it wants to keep the expansion on track, New York Fed President John Williams said Wednesday.
Williams said the economy "now looks weaker then previously thought", and referred to sustained high levels of uncertainty for the economy, saying that business investment was slowing in response to issues such as trade concerns and geopolitical risks. His comments come against the background of high expectations for another interest rate cut from the Fed at its policy meeting later this month. He's the first of several Fed officials due to speak at various events on Wednesday.
Key quotes:
"We’ve...seen a decline in exports and weakening manufacturing data, reflecting slowing global growth and uncertainty related to trade and geopolitical risks.""One implication of (downward revisions to 2Q GDP and employment) is that the economy’s underlying momentum was already somewhat less robust than previously thought, even before recent developments pointed to a less rosy outlook."July rate cut and subsequent messaging "have contributed to an easing of financial conditions that should help sustain the expansion and get us closer to our dual mandate goals.""Concerns around trade policy with China are adding to an uncertain picture. My contacts in the business community have said this is making them more cautious about investment. The effects of this angst are already showing up in the investment numbers." 