Washington (AFP)

The head of the US Central Bank will deliver a crucial speech Friday at Jackson Hole and try to explain what he intends to do to preserve the growth of the world's largest economy under the watchful eye of the markets and the repeated attacks of Donald Trump .

The president of the Fed speaks Friday at 1400 GMT for the first time since the decline in rates in late July, before the elite of central bankers and economists traditionally gathered each year in the prestigious mountain resort of Wyoming.

Markets, waiting for confirmation of their expectations on rate cuts like the president, a strong supporter of a sharp reduction in the cost of credit, will analyze any word.

Thursday morning, after already a series of tweets the day before that had compared Mr. Powell to an incompetent golf player "lacking fingering", Donald Trump has recidivated.

"Our Federal Reserve is preventing us from doing what we have to do," he writes indignantly that Germany sells "30-year negative return bonds". He accuses the Fed of "putting the US at a competitive disadvantage".

US interest rates, which the Fed modestly dropped at the end of July for the first time in more than a decade, are between 2% and 2.25% while US growth is 2.1% (annual 2nd quarter) while Germany is close to recession.

But the president blames the Central Bank for having raised the end of 2018 rates too quickly and caused a strengthening of the dollar which handicaps the United States in the middle of a trade war.

For his part, Jerome Powell, who was appointed by Donald Trump in early 2018 before quickly falling into disfavor, advance on a narrow path.

It strives to accompany low inflation and extend the longest US growth in modern history by granting what it called a "mid-cycle adjustment" without promising "a series of drops" in rates.

He is also committed to defending the independence of the Fed and keeping the cohesion of its Monetary Committee, divided in the face of remedies to the prospect of slowing down.

- Mixed signs -

For the US business shows mixed signs combining a strong consumption with a sluggish manufacturing sector and disappointing business investments and cautious with trade tensions.

The next monetary meeting of the Central Bank is scheduled in three weeks, September 17 and 18, and the markets are expecting a further decline in interest rates. But how big?

"We will hopefully have more clarity on future rate cuts when Mr Powell speaks on Friday, but there is little evidence that the Fed wants to resist the markets," said Michael Pearce, economist for Capital Economics.

Esther George, president of the Kansas City Fed, host of the Jackson Hole forum who voted against the decision to cut rates in July, appeared to camp on her positions Thursday.

Asked about CNBC from the station, she said the rate level seemed to be "well placed" at the moment.

She admitted that the US economic outlook posed downside risks with "the weakening of global growth and the degree of uncertainty associated with trade issues". But she keeps a growth projection of 2%: "I think a growth of 2% is still possible," she said.

The Monetary Committee has shown that it wants to keep its "open options" on the evolution of rates, according to the minutes of its last meeting published Wednesday.

"It is important to maintain a range of options in setting the level of federal funds rates" and to "remain flexible," notes this report.

© 2019 AFP