While speaking at the World Business Forum, the ex-Federal Reserve (Fed) Chair Janet Yellen crossed wires via CNBC. The news conveys the ex-official's comments saying that Pronounced wealth inequality that has built up for decades poses a major threat to a US economy that is in otherwise “excellent” shape.
Key quotes
US-China tariff war is having a detrimental impact both on businesses and consumers through higher prices and a general air of uncertainty.
While she doesn’t see a recession on the horizon, she also noted that the risks are piling up.
With three rate cuts this year, there remains “not as much scope as I would like to see for the Fed to be able to respond to that. So there is good reason to worry.”
Despite the central bank’s efforts to guide the economy, Yellen cited “a very worrisome long-term [trend] in which you have a very substantial share of the U.S. workforce feeling like they’re not getting ahead. It’s true, they’re not getting ahead.”
FX implications
Even if markets ignored the news, this could exert additional downside on the risk-tone and could weigh on the AUD/USD that is currently taking rounds to 0.6790 by the press time of early Asian morning on Friday.
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