Fed Vice Chair Clarida says the global economic outlook has worsened since July meeting

Federal Reserve Vice Chair Richard Clarida said Friday that the global economy has deteriorated in the past month.

“Obviously, the global economy has worsened since our July meeting,” Clarida told CNBC’s Steve Liesman on Friday from the Fed’s economic policy symposium in Jackson Hole, Wyoming. “The global economy is slowing and there’s powerful disinflationary pressures.”

However, Clarida said the U.S. economy is “in a good place,” adding he doesn’t see a heightened recession risk.

“I think you have to look at a broad range of indicators, but the ones I focus on are not signalling an elevated risk of a recession,” Clarida said. “My guess is next year the economy will be at or above trend growth under appropriate policy.”

Stocks plunged on Friday as the high-stakes trade war between the U.S. and China deepened, with the Dow Jones Industrial Average tumbling as much as 745 points. The critical spread between the 10-year Treasury yield and the 2-year yield also inverted amid the market turmoil, sending a recession warning.

China vowed to retaliate with tariffs on $75 billion more of U.S. goods and resume duties on American autos and components. President Donald Trump struck back at China’s countermeasure, saying he’s ordering American companies to immediately start looking for an alternative to China.

Trump also lashed out at Fed Chairman Jerome Powell yet again, this time questioning whether he is a “bigger enemy” to the U.S. than Chinese President Xi Jinping.

Powell said in his annual remarks at the symposium that the global economic outlook “has been deteriorating ” and there is no “rulebook” on trade wars. He promised that the Fed “will act as appropriate to sustain the expansion.”