Trump said he will raise tariffs on $250 billion in Chinese goods to 30% and hike duties on another $300 billion in products to 15%.Politicsread more
Stocks dropped after Donald Trump ordered that U.S. manufacturers find alternatives to their operations in China.US Marketsread more
Federal Reserve Vice Chair Richard Clarida said Friday that the global economy has deteriorated in the past month.Marketsread more
The latest escalation in the trade war ups the odds the economy will fall into recession and that the Fed will aggressively cut rates.Market Insiderread more
Here are the products that stand to be the most affected by China's new tariffs on $75 billion worth of U.S. goods.Marketsread more
"We don't need China and, frankly, would be far better off without them," Trump tweeted.Politicsread more
"My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?" Trump wrote amid a series of tweets that rattled markets Friday.Politicsread more
The final week of August could be highly volatile as markets fret over the economy and the latest developments in trade wars.Market Insiderread more
The death comes as federal and state health officials investigate a slew of lung illnesses in connection to e-cigarette use.Health and Scienceread more
Bank of England Governor Mark Carney says trade war has a confidence effect on business around the worldMarketsread more
Supreme Court Justice Ruth Bader Ginsburg has completed a three-week course of radiation therapy for cancer, the top court said in a statement Friday.Politicsread more
Should Federal Reserve officials meet expectations and raise interest rates next week, they will be doing so over the objections of some high-profile experts, including one who used to work for the central bank.
A coalition of economists released a letter Friday urging the Fed to change the criteria it uses to make decisions. Specifically, the group, called "Fed Up," is advocating for a higher inflation rate target than the current 2 percent level. Among its members is former Minnesota Fed President Narayana Kocherlakota.
Raising the target, the economists argue, will allow the economy to grow further, whereas a steady diet of rate hikes to stave off inflation could choke growth and cause another recession.
Josh Bivens, the director of research at the Economic Policy Institute, said in a conference call that allowing inflation to run higher will provide the Fed some policy cover when the next downturn hits, where it could keep policy looser for longer.
"The last decade should have shown us that the political system severely controls the tools that policymakers have to fight recessions," he said. "I see the higher inflation target as one of these buffers."
Indeed, the Fed has come under a great deal of political scrutiny as it has sought to engineer the economy away from the Great Recession that ended in June 2009. The central bank kept its target funds rate near zero for seven years before gingerly adding three quarter-point hikes since December 2015.
Markets widely expect the Fed to raise another 25 basis points when the Federal Open Market Committee convenes for its two-day meeting next week. Traders have priced in one more hike in December, but the path beyond that is uncertain.
These economists advocate an even slower path than the one on which the committee currently finds itself.
"The conversation about monetary policy rules that we follow going forward is a really important one, and it would have been important even if we hadn't gone through the Great Recession," said Jason Furman, chairman of the Council of Economic Advisers under former President Barack Obama and currently senior fellow at the Peterson Institute for International Economics. "Having that [inflation] target today just leaves you less room than it used to."
While the Fed presided over a period of recovery and the second-longest bull market in history, the era also will be remembered for its historically slow growth and widening wealth disparities.
"When I write the history of the 2010s, I think both Ben Bernanke and Janet Yellen are going to be judged quite harshly," said Brad DeLong, an economic historian and professor of economics at the University of California at Berkeley.
DeLong believes the two Fed chairs should have been raising rates after the recession ended. Because they waited too long, rate hikes now threaten to send the economy back into a downturn, he said.
"The attempt to push them higher, in fact, will be such a recessionary shock that the Fed will have no room to respond," DeLong said.
To be sure, some of the arguments for a higher inflation target seem counterintuitive — that doing so somehow gives the Fed more room for accommodation in another downturn, or that inflation actually benefits consumers.
However, Nobel economist Joseph Stiglitz said history bears out the position that workers, particularly women and minorities, tend to get a boost when inflation is elevated. Yellen has toyed publicly with the idea of letting the economy run hotter than normal for a while, though she also has said the scenario is not likely.
"The only time when the unemployment rate for these groups goes down and wages go up is when we have a very tight economy, much tighter than the Fed has in mind when it's focusing on a 2 percent inflation target," Stiglitz said. "As far as workers go, the answer is unambiguous: They are the winners in this."
Watch: Why is the Fed getting so aggressive now?