U.S. President Donald Trump speaks to members of the media before boarding Marine One on the South Lawn of the White House in Washington. (Photographer: Andrew Harrer/Bloomberg)

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The U.S. Fed chairman raises tariff concerns on Capitol Hill while continuing to tout the strength of America’s economy, and Chinese officials search for ways to offset the growing impact of China’s trade conflict with the U.S. Here are some of the things people in markets are talking about.

China Weighs Its Options

China’s options to support its economy go beyond simple monetary easing. With data released Monday showing that output in the second quarter slowed and factory activity cooled more than expected, attention is now focused on how the government can mitigate the effects of the escalating trade battle. Given that a high-profile campaign to cut debt is also under way, an old-fashioned credit-fueled  splurge is no longer a preferred option. Instead, government officials could lower taxes to encourage consumption and investment, target cuts to the reserve-requirement ratios or even loosen environmental restrictions that have curbed growth.

Trump Backtracks on Russia, Sort Of

Trump said Tuesday he accepts the conclusion by U.S. intelligence agencies that Russia interfered in the U.S. presidential election, marking a rare reversal from his comments on Monday amid a backlash from Republicans. But even with a prepared statement in hand, he introduced doubt again, saying the meddling in the 2016 voting “could be other people also.” Though the U.S. president said he accepts his intelligence community’s findings that Russia intervened, he didn’t retreat from the savaging he dealt Special Counsel Robert Mueller’s investigation while standing beside Russian President Vladimir Putin. Nor did he back down from comments blaming U.S. “foolishness and stupidity” for the deterioration of relations with Putin.

Powell Talks Trade Threats

U.S. Federal Reserve Chairman Jerome Powell  said protectionism can hurt economic growth and undermine wages, just as the U.S. ratchets up trade tensions with commercial rivals as well as longstanding allies. Testifying Tuesday before the Senate Banking Committee, Powell was responding to lawmakers’ questions about the economic impact of President Donald Trump’s tariffs. “In general, countries that have remained open to trade, that haven’t erected barriers including tariffs, have grown faster. They’ve had higher incomes, higher productivity,” he said. But Powell reiterated his upbeat assessment of the economy and signaled that while policy makers plan to continue gradually raising interest rates, the tightening isn’t on autopilot.

Japan, EU Bolster Trade Links

Japan and the European Union signed a trade agreement on Tuesday in Tokyo that lowers barriers on the movement of goods and services between the two economies and provides a counterweight to U.S. protectionism. The Economic Partnership Agreement will remove a wide range of duties and regulatory obstacles between the EU and Japan, helping Japanese car exports and making it easier for European farmers to sell their produce in the Asian nation. Japanese Prime Minister Shinzo Abe, European Commission President Jean-Claude Juncker and European Council President Donald Tusk signed the pact. While the deal has been in the works since 2013, Europe and Japan are rallying to bolster multilateral agreements as Trump shuns such pacts and imposes tariffs on trading partners.

Bitcoin’s Strange Spike

What’s up with Bitcoin? The digital token suddenly surged as much as 12 percent Tuesday. The move accelerated as the cryptocurrency pushed past the $7,000 price level for the first time in more than a month. Bitcoin last traded above $7,000 on June 8, before getting caught in a sector-wide selloff that wiped out about $42 billion over the following weekend. Some observers pinned that retreat on an exchange hack in South Korea, while others pointed to lingering concern over a clampdown on trading platforms in China. Cryptocurrency venues have come under growing scrutiny around the world in recent months amid a range of issues, including thefts, market manipulation and money laundering.

What we’ve been reading

This is what caught our eye over the last 24 hours.

  • Goldman Sachs ushers in a new era as next CEO named.
  • An ex-Googler is set to become one of China’s 25 richest people.
  • Stocks and the dollar rallied Tuesday.
  • Theresa May fends off another Tory rebellion over Brexit
  • This Chinese carmaker startup is worth $4 billion. It hasn't sold a car yet.
  • Home DNA testing is gaining popularity in Japan.
  • These are the  secret rooms hotels don't tell you about. 

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