AFP, Zurich :
The US central bank is ready to step in to preserve the American economy’s expansion amid mounting risks, Federal Reserve Chairman Jerome Powell said on Friday.
While the Fed is not expecting a recession, trade frictions – as well as slower global growth and persistently low inflation – are among the “significant risks” that policymakers are watching, Powell said during a conversation at the University of Zurich.
The remarks should strengthen widespread expectations that the central bank will cut interest rates later this month.
As it becomes increasingly apparent that the US economy has slowed in 2019, President Donald Trump has publicly berated Powell and the Fed for failing to loosen monetary policy fast enough – something Powell said Friday policymakers tune out.
“We see the most likely case for the US and for the world too as continued moderate growth,” Powell said. “We’re not forecasting or expecting a recession.”
He added that the Fed will “continue to act as appropriate to sustain this expansion,” while “trade policy uncertainty will be weighing on business investment decisions.”
Powell’s remarks echoed those made earlier this week by New York Fed President John Williams, the vice chair of the central bank’s monetary policy committee, who likewise said policymakers should be “vigilant” and “act as appropriate” to bolster growth.
The economic landscape has shifted this year, as business investment weakened noticeably, manufacturing has fallen into decline and job creation has slowed.
Powell noted, however, that unemployment had remained near historic lows for about 18 months while wages were rising, fueling consumer spending.
“The consumer has been strong. The service sector has been strong,” he said. “Our labor market is in quite a strong position.”
The US central bank is ready to step in to preserve the American economy’s expansion amid mounting risks, Federal Reserve Chairman Jerome Powell said on Friday.
While the Fed is not expecting a recession, trade frictions – as well as slower global growth and persistently low inflation – are among the “significant risks” that policymakers are watching, Powell said during a conversation at the University of Zurich.
The remarks should strengthen widespread expectations that the central bank will cut interest rates later this month.
As it becomes increasingly apparent that the US economy has slowed in 2019, President Donald Trump has publicly berated Powell and the Fed for failing to loosen monetary policy fast enough – something Powell said Friday policymakers tune out.
“We see the most likely case for the US and for the world too as continued moderate growth,” Powell said. “We’re not forecasting or expecting a recession.”
He added that the Fed will “continue to act as appropriate to sustain this expansion,” while “trade policy uncertainty will be weighing on business investment decisions.”
Powell’s remarks echoed those made earlier this week by New York Fed President John Williams, the vice chair of the central bank’s monetary policy committee, who likewise said policymakers should be “vigilant” and “act as appropriate” to bolster growth.
The economic landscape has shifted this year, as business investment weakened noticeably, manufacturing has fallen into decline and job creation has slowed.
Powell noted, however, that unemployment had remained near historic lows for about 18 months while wages were rising, fueling consumer spending.
“The consumer has been strong. The service sector has been strong,” he said. “Our labor market is in quite a strong position.”
