(Bloomberg) -- The argument in favor of cutting interest rates has strengthened recently as cross currents buffet the U.S. economy, amid heightened uncertainty, Federal Reserve Vice Chairman Richard Clarida said.
“The case for providing accommodation has increased,” he said Friday in an interview on Bloomberg Television with Tom Keene. “Especially in the last six or eight weeks, there has been elevated uncertainty about the outlook.”
Fed officials left interest rates on hold in a meeting earlier this week but said uncertainty over their outlook had increased. That was widely interpreted as opening the door to an interest-rate cut as early as the Fed’s next gathering, in late July.
Clarida brushed aside concerns that the Fed’s political autonomy is at risk from President Donald Trump’s relentless criticism of the central bank. “I don’t think our independence is under threat,” he said.
Bloomberg News reported this week the president believes he has the authority to strip the Fed’s chairmanship from Jerome Powell after Trump asked White House lawyers to explore the legality of such a move.
Asked how central bankers were responding to such reports, Clarida said, “We’re just doing our job.”