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Fragile World Manufacturing Front and Center of Fed Rate Debate

  • Production suffering from weaker economies, trade policies
  • Powell & Co. leave door open to cut even as consumers spend
A worker using the manual lathe tin at a manufacturing facility in Random Lake, WI.

A worker using the manual lathe tin at a manufacturing facility in Random Lake, WI.

Photographer: Patrick Mouzawak/Bloomberg

Federal Reserve policy makers will meet in two weeks to weigh an interest-rate cut against the backdrop of a booming U.S. stock market, a seemingly unflappable American consumer and steady job growth.

Much of the reason for looking past all this strength lies in tepid manufacturing, lackluster capital spending and floundering global economies. All that, along with adverse repercussions of tariffs and trade policy, have introduced risks to an otherwise stable U.S. economy.