On July 16, Federal Reserve Chairman Jerome Powell gave a speech in Paris at a Conference organized by the French Ministry for the Economy and Finance. In this speech, Powell outlined his current thinking about central bank policy and intervention in the marketplace. It is clear from this speech that Chairman Powell sees the role of the Fed as an active participant in the global economic order. His focus is on prolonging the existing GDP growth trend in the US with a careful eye on inflation which, so far, is not rising above the Fed’s 2% target rate.
Powell believes the Fed must remain sensitive to global economic trends and conditions as the US cannot be thought of as an isolated economy. The risks to global and to US growth caused by the current trade and tariff disputes are real and should be negotiated away as soon as possible.
Powell also discussed the wide range of financial tools available to the Fed, if the economy began to slow down materially. Such programs as ‘quantitative easing’ and balance sheet expansion have recently worked to keep long-term interest rates in check, helping to encourage investment and expansion.
His final point was to emphasize the need for central banks to be transparent and to hold themselves accountable when decisive actions are required. See the link below for full text of the speech. https://www.federalreserve.gov/newsevents/speech/powell20190716a.htm