Article snippet: WASHINGTON (AP) — Chairman Jerome Powell said Tuesday that the Federal Reserve is prepared to respond to the Trump administration’s trade conflicts to protect the U.S. economy, signaling that the Fed will cut interest rates if necessary. Powell’s comments gave a lift to stock markets, with the Dow Jones industrial average up over 400 points at mid-day. Speaking at a Fed conference in Chicago, Powell said, ‘‘We are closely monitoring the implications of these developments for the U.S. economic outlook and, as always, we will act as appropriate to sustain the expansion.’’ Powell didn’t explicitly say what the Fed would do if it concluded that the administration’s trade conflicts were damaging the economy. But expectations are rising that the Fed will cut rates at least once and possibly twice before year’s end, in part because of the consequences of the trade war. There is also concern that the U.S. economy faces a growing risk of a recession. Trump has imposed far-reaching tariffs on imports on China, which has retaliated with tariffs of its own on U.S. exports. He has also threatened to impose an escalating series of tariffs against Mexico unless Mexico stops a flow of migrants from Central America into the U.S. At a news conference in London, President Donald Trump reiterated that his import taxes on goods from Mexico will start taking effect next week at a level of 5%, rising to a peak of 25% until Mexico complies with his demand to cut off Central America migr... Link to the full article to read more