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