Nation & World

Fed uncertain on banking for marijuana firms

Federal Reserve Chair Jerome Powell said Wednesday that the U.S. central bank has not resolved how financial institutions should deal with marijuana businesses.

Marijuana usage is permitted in some states, but not by federal law. Powell says the disparity puts Fed regulators in a very difficult position and that the Fed would love to see the hazy issue clarified.

Officials in California are considering setting up a state-run bank that would allow marijuana business owners to access banking services without running afoul of federal law.

He made the comments at a news conference following a Fed meeting at which the central bank raised its benchmark interest rate for the second time this year. As widely anticipated, the Fed raised its short-term federal fund rate — what banks charge each other— by 0.25 points to a range of 1.75 to 2 percent.

Powell said the central bank is hearing growing concerns from business executives about the Trump administration’s trade policies, including anecdotal cases where companies have postponed larger purchases or new hires.

But those trends have yet to impact an economy that Powell says “is in great shape.”

“You’re beginning to hear reports of companies holding off on investments and hiring people,” Powell said in a news conference Wednesday following the Fed’s move to raise its benchmark interest rate. “For now, we don’t see that in the numbers at all.”

Trump has slapped tariffs on steel and aluminum imports, has threatened additional tariffs on $50 billion of Chinese imports, and has directed his administration to consider further duties on imported cars. Those moves have lifted steel and aluminum costs.