By | Rachel Brooks
Staff | Telegraph Local
Above, Jerome Powell appears on Bloomberg Markets and Finance.
The U.S. economy faces “longer term concerns” says the Fed Chair Powell. This was reported by Reuters within the last 24 hours.The head of the U.S. Federal Reserve Jerome Powell warned Wednesday that an “extended period” of weak economic growth now looms over the United States. He has vowed to use the U.S. central bank’s power as per needed. He has called for additional fiscal spending in efforts to stem coronavirus pandemic fallout.
Within the last 24 hours, The Wall Street Journal reported that stocks fall as Powell continues to stress the uncertainty of the markets. The Dow Jones Industrial fell by 500 points on Wednesday, citing The Wall Street Journal. Likewise, the S&P 500 and the blue-chip index opened at “modest lows.” Powell stated that a potential secondary stimulus could be needed to support the economy’s recovery from this coronavirus-induced market contraction. The Wall Street Journal has stated that global stocks have fallen. This was signaled after the Hong Kong markets opened on Thursday to a drop. Hang Seng Index and Nikkei 225 both dropped by 1.3% on the morning of May 14.
The Federal Reserve states via Twitter that a live speech will be conducted on May 21 to assess the impact COVID-19 is having on community economics. Observable benchmark decline was seen from South Korea and Australia. South Korea and Australia dropped by 1% each. The Shanghai Composite saw declines of 0.7%.
As the Federal Reserve gives its cautionary statements regarding the markets, U.S. President Donald Trump weighs in his opinions.
“When the so-called “rich guys” speak negatively about the market, you must always remember that some are betting big against it, and make a lot of money if it goes down. Then they go positive, get big publicity, and make it going up. They get you both ways. Barely legal?
As I have said for a long time, dealing with China is a very expensive thing to do. We just made a great Trade Deal, the ink was barely dry, and the World was hit by the Plague from China. 100 Trade Deals wouldn’t make up the difference – and all those innocent lives lost!” said Trump, in two consecutive tweets that were published within the last 24 hours.
The presidential comments regarding the markets from the U.S. perspective signal the corresponding strain on world markets and world diplomacy as well. Trump’s accusations that the coronavirus was purposely generated from China have sparked some controversy with the Far Eastern nation. This controversy continues to escalate. Also within the last 24 hours, Al Jazeera reports that the U.S. FBI has accused China of hacking into U.S.-based coronavirus research. Such behavior and encroachment on intellectual property was the same grievance that put pressure on the Sino-American trade attrition crisis beginning circa 2017. The BBC published a quick guide to the Sino-American trade conflict as it stands in 2020 in January. Since January, these trade conflicts have been severely pressured by the market strain COVID-19 pandemic creates.
Also within the last few hours, Reuters reports that an advocacy group has exposed Federal Trade Commission violations of the Chinese video-sharing giant TikTok that is headquartered out of Singapore, but whose company ByteDance adheres to Beijing law. The FTC complaint was filed by The Center for Digital Democracy, Campaign for a Commercial-Free Childhood. The Center for Digital Democracy states that TikTok has violated children’s privacy laws. TikTok has paid a fine of $5.7 million. See more background on the TikTok company in The New York Times archives.
As further disputes over intellectual property, FTC compliance, and COVID-19 culpability continue between the U.S. and China the declining U.S. and Chinese stock markets may be directly impacted. This will in turn reflect on the measures that the Federal Reserve takes.