Fed chief says US econ­omy’s glass is ‘more than half full’

Muscat Daily - - BREAK -

Wash­ing­ton, US – Fed­eral Re­serve Chair­man Jerome Pow­ell struck an up­beat tone in gaug­ing the abil­ity of pol­icy mak­ers to ex­tend the record US eco­nomic ex­pan­sion, while sig­nal­ing in­ter­est rates would prob­a­bly re­main on hold.

“At this point in the long ex­pan­sion, I see the glass as much more than half full,” Pow­ell said on Mon­day evening in Prov­i­dence, Rhode Is­land.

On his out­look for bor­row­ing costs, Pow­ell re­peated the mes­sage he’s ham­mered since the Fed low­ered rates for the third time this year on Oc­to­ber 30, sig­nal­ing pol­icy is on hold for now.

“We see the cur­rent stance of mone­tary pol­icy as likely to re­main ap­pro­pri­ate as long as in­com­ing in­for­ma­tion about the econ­omy re­mains broadly con­sis­tent with our out­look,” he said, ad­ding that it would sup­port a strong labour mar­ket and ‘re­turn in­fla­tion de­ci­sively to our sym­met­ric two per cent ob­jec­tive’.

Pow­ell fol­lowed up with the well-worn caveat that pol­icy ‘is not on a pre­set course’ and the Fed would ad­just if there were a ‘ma­te­rial’ change in its out­look.

Fed of­fi­cials cut rates from July to Oc­to­ber by three-quar­ters of a per­cent­age point as global growth de­te­ri­o­rated, busi­nesses sen­ti­ment was rocked by un­cer­tain­ties over trade and in­fla­tion re­mained stub­bornly below tar­get. Pow­ell cast those cuts as de­signed to keep the US econ­omy strong and pro­vide in­surance against a more se­ri­ous down­turn.

He said on Mon­day the cuts have al­ready proved suc­cess­ful at pre­vent­ing the year’s woes from sig­nif­i­cantly erod­ing the over­all out­look for growth in the US.

“The full ef­fects of th­ese mone­tary pol­icy ac­tions will be felt over time, but we be­lieve they are al­ready help­ing to sup­port con­sumer and busi­ness sen­ti­ment and boost­ing spend­ing in in­ter­est-sen­si­tive sec­tors, such as hous­ing and con­sumer durable goods,” he said.

Pow­ell also high­lighted the progress that’s been made since the Great Re­ces­sion in get­ting many Amer­i­cans off the side­lines and into the labour force.

Fed­eral Re­serve Chair­man Jerome Pow­ell

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