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While speaking at the World Business Forum, the ex-Federal Reserve (Fed) Chair Janet Yellen crossed wires via CNBC. The news conveys the ex-official’s comments saying that Pronounced wealth inequality that has built up for decades poses a major threat to a US economy that is in otherwise “excellent” shape.

Key quotes

US-China tariff war is having a detrimental impact both on businesses and consumers through higher prices and a general air of uncertainty.

While she doesn’t see a recession on the horizon, she also noted that the risks are piling up.

With  three rate cuts this year, there remains “not as much scope as I would like to see for the Fed to be able to respond to that. So there is good reason to worry.”

Despite the central bank’s efforts to guide the economy, Yellen cited “a very worrisome long-term [trend]in which you have a very substantial share of the U.S. workforce feeling like they’re not getting ahead. It’s true, they’re not getting ahead.”

FX implications

Even if markets ignored the news, this could exert additional downside on the risk-tone and could weigh on the AUD/USD that is currently taking rounds to 0.6790 by the press time of early Asian morning on Friday.