Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee on his nomination to become chairman of the U.S. Federal Reserve in Washington, November 28, 2017.

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Business investments across the U.S. have slowed recently as uncertainties over the economic outlook linger, Federal Reserve Chair Jerome Powell said Wednesday in prepared testimony to the House House Financial Services Committee.

“Crosscurrents have reemerged,” Powell said in his testimony, noting that investments slowed down “notably.” He also said that the outlook has not improved in recent weeks. 

“Overall growth in the second quarter appears to have moderated,” Powell said in the prepared remarks. “Many FOMC participants saw that the case for a somewhat more accommodative monetary policy had strengthened. Since then, based on incoming data and other developments, it appears that uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook.”

The U.S. and China have been engaged in a trade war for more than a year. Late last month, the two countries agreed to restart trade negotiations in an effort to end the spat. Meanwhile, data from overseas — especially in Europe — are showing weakening economic activity.

Inflation remains muted but should move back towards the Fed’s 2% objective over time, he said. Powell also reiterated the central bank will “act as appropriate” to maintain the current economic expansion.

Powell’s testimony comes after the Fed opened the door to cutting rates at its previous monetary policy meeting in June.

Markets cheered the central bank’s remarks, with stock indexes reaching all-time highs last week. Traders are also pricing in a 100% probability of a rate cut before the end of July, according to the CME Group’s FedWatch tool.

However, the latest U.S. jobs report raised questions about whether the Fed will move forward with lowering rates at its July meeting. The U.S. economy added 224,000 jobs in June, easily topping economist expectations.

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