Jerome Powell, Chairman of the Federal Reserve has expressed concern over some of the recent hard-hitting trade moves initiated by President Donald Trump in relation to China. Powell said that its repercussions could be far-reaching, possibly affecting the overall economy as well as the confidence levels of business investors.

Powell used the term ‘shock’ to highlight how gravely Trump’s policies seem to have impacted business confidence across the country. He further added that it’s the growing concern among businesses that have prompted the Fed to consider cutting rates too.

While speaking to a Senate committee, Powell said that even though the general sentiment of the business community seems to have recovered over the past few weeks, a lot still needs to be achieved in this regard. He mentioned that several manufacturers have been raising complaints to the Fed regarding the price of materials as well as access to supplies.

He even revealed that surveys conducted in the month of May to gauge business confidence produced “quite negative” results. This was immediately after the collapse of trade negotiations between the world’s two superpower economies, US and China, he said.

Further speaking about the rate cuts, Powell mentioned that the talk failure news came in as “a bit of a confidence shock” which actually urged the Federal Reserve to “indicate at our last meeting [that] we were looking at changing rates.” Economists and investors in the US strongly feel that a cutback in the standard lending rate is highly likely to happen by the end of this month.

However, in spite of the “aggressive” trade moves by the US, Powell convinced the committee members that the Fed still stands committed to helping economic growth in every way possible. “The bottom line is the economy is in a very good place and we want to use our tools to keep it there. It’s very important this expansion continues as long as possible.”