Though the threatened tariffs on Mexico never materialized and China and the United States have agreed to resume talks to reach a trade deal, that "did little to alleviate the uncertainty that Fed officials believe is contributing to cooling momentum in global trade and domestic capex plans", Deutsche Bank's U.S. economics team wrote this week. Visit MarketWatch.com for more information on this news.
Powell will testify again on Thursday before the Senate Banking Committee.
Gold futures on the COMEX division of the New York Mercantile Exchange rose significantly on Wednesday as US Federal Reserve Chairman Jerome Powell's testimony boosted hopes for interest-rate cuts.
"If anything, relative to earlier in the year, the conditions, the arguments, for adding policy accommodation have strengthened over time", Williams told reporters on the sidelines of an event at the University at Albany - State University of NY.
Brainard, in a separate appearance in Scranton, Pennsylvania, piled on.
"Taking into account the downside risks at a time when inflation is on the soft side would argue for softening the expected path of monetary policy according to basic principles of risk management", Brainard said in remarks prepared for delivery to the Community Bankers Roundtable in Scranton, Pennsylvania. Bostic is not a voting member of the Fed's interest-rate committee but will be in 2021.
The Fed has kept its current benchmark overnight interest rate in a range of between 2.25% and 2.50% since December.
That added a full additional rate cut to the one investors already had expected, and added market pressure to the Fed's growing list of concerns.
Powell, in appearances on Capitol Hill this week, bolstered expectations such a cut is coming, and focused on the need to protect the United States against fallout from a weak global economy.
But Trump's tweets about Mexico had a particularly unsettling impact, touching off enough volatility and doubt about the future that it pushed the Fed towards the very rate cuts Trump has demanded for other reasons.
In prepared remarks released before the hearing, Powell contrasted the Fed's "baseline outlook" of continued USA growth against a considerable set of risks - including persistently weak inflation, a slowdown in other major economies, and a downturn in business investment driven by trade risks.
That can make it harder for the Fed to push inflation, which fell to 1.5% last month, back to its target.
But he added that his analysis of inflation expectations, based on surveys of professional forecasters and business executives, left him unconvinced that expectations are slipping. In addition, less "noisy" measures of actual inflation, which strip out the most volatile terms, indicate "that right now we are very close to our 2% price stability mandate".