By Paul Hannon
The U.S. Federal Reserve could cut its key interest again to cushion the economy against threats to growth, chief among which are high levels of trade uncertainty, Federal Reserve Bank of St. Louis President James Bullard said Tuesday.
Speaking to investors in London, Mr. Bullard said the U.S economy is slowing and faces a number of "downside risks" that could require a further "insurance" move from policy makers. "We could do more," he said.
Mr. Bullard said he expects uncertainty about trade relations with China and other large economies to continue over coming years. The U.S and China have reached a truce in their trade dispute, but have yet to resolve their disagreements. "U.S monetary policy can not reasonably react to the day-to-day give and take of trade negotiations," he said.
Mr. Bullard voted for a larger rate cut than the majority of his fellow policy makers when the Fed eased policy in September. He said the central bank could reverse course if the U.S. economy avoided a sharper slowdown.
"We can take back that insurance in 2020 and 2021," he said.
Write to Paul Hannon at Paul.Hannon@wsj.com
(END) Dow Jones Newswires
October 15, 2019 05:19 ET (09:19 GMT)
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