As Fed policymakers comb data, few decisive signals on outlook
Kosovo voters focus on Serbia peace deal in election
Federal Reserve policymakers signaled they are on high alert for signs that uncertainty over trade policy and slowing global growth are beginning to hold back the broader U.S. economy, but so far they have flagged little in the data that is pointing one way or the other.
A report showed jobs growth slowed down in September and wage growth stalled, even as unemployment dropped to a 50-year low.
Surveys released earlier in the week showed factory activity is contracting and growth in the services sector is stagnating.
Each report sent traders scrambling to bet on how the Fed might react:, they pared bets from only days earlier that the Fed would deliver two more rate cuts this year, and they now expect it to stop at just one.
But for their part U.S. central bankers, a few of whom opposed the Fed's two interestrate cuts so far this year and two of whom wanted even bigger rate cuts, generally stuck to their scripts, some more literally than others.
"While not everyone fully shares economic opportunities and the economy faces some risks, overall it is - as I like to say - in a good place," Fed Chair Jerome Powell said in brief remarks in Washington. "Our job is to keep it there as long as possible."
Powell and Fed Vice Chair Richard Clarida have repeatedly used "in a good place" to describe the economy, even as the central bank delivered rate cuts in both July and September designed to keep growth on track.
As Fed policymakers sift through the economic data ahead of their next interest-rate setting meeting on Oct. 29-30, they remain divided as they assess the downside risks of the trade dispute and of geopolitical tensions to the economic outlook.
September's rate cut drew three dissents out of 10 votes; at least two non-voters have since said they too disagreed with the decision.
Policymakers are "wrestling with" figuring out if the U.S. economy is headed for a "soft landing" or a "steep decline," Atlanta Fed President Raphael Bostic said during a moderated discussion at Tulane University in New Orleans.
Prolonged U.S. trade tensions with China are causing some businesses to sit "on the sidelines" and have the potential to affect consumers, he said. Still, he projects that the economy will grow abovetrend in 2019, lifted by a tight labor market with an unemployment rate at 3.5%.
"There are lots of reasons to be optimistic about this economy," Bostic said. "But also we need to recognize that there's a lot of uncertainty out there."
U.S. President Donald Trump said there is a "very good chance" of a trade deal with China emerging from next week's scheduled talks, though he has made similar pronouncements ahead of past negotiations.
Voting centers opened in Kosovo for national elections where the main issues for the country's 1.9 million eligible voters are tackling corruption and a peace deal with Serbia which would pave the way for United Nations membership.
The elections, the fourth since Kosovo's declaration of independence in 2008, were called after Prime Minister Ramush Haradinaj resigned in July when he was summoned to appear before a war crimes court. Haradinaj has been questioned over his role in the 1998-99 war as one of the commanders of the former Kosovo Liberation Army (KLA) who fought for independence from Serbia.
"Voting was very easy but let's see what our votes will bring," said taxi driver Avdi Morina, 46, after voting in a sport hall in the capital Pristina. "We want well-being and jobs for young people," retired doctor Muharrem Bajrami said after casting his vote in the capital. Opinion polls have pointed to public dissatisfaction with Haradinaj's record.