Economy slows, Fed hits brakes, and uncertainty clouds Washington’s next steps

Business investment contracts for second straight quarter, as companies pull back amid concerns

A sharp contraction in business spending is slowing the U.S. economy and could cause deeper pain going forward, but political leaders and policy makers are giving almost no signals about what they plan to do next.

The Commerce Department on Wednesday said the U.S. economy grew at a 1.9 percent annualized pace from July through September, far short of the 3 percent sustained clip that the White House promised would result from the 2017 tax cut law.

Several hours after the Commerce announcement, the Federal Reserve cut interest rates by a quarter percentage point to just under 1.75 percent in a bid to spur more growth. But the central bank also hinted that there might not be any more interest rate cuts on the horizon, as officials plan to monitor developments going forward, despite constant pressure from President Trump to do more.

View the complete October 30 article by Heather Long and Andrew Van Dam on The Washington Post website here.