Fed Chair Affirms Patient Stance

by Marilou Moursund on February 26, 2019

in Economic Indicators,Fed policy,interest rates,Uncategorized

The Chairman of the Federal Reserve, testified before Congress today. He affirmed that the Fed would remain patient and data dependent when deciding whether or not to raise interest rates. From the linked WSJ article:

Fed officials raised their benchmark short-term rate four times last year, most recently in December, but have since signaled further increases are on hold.

Senators appeared content with the Fed’s stance: They asked Mr. Powell so few questions about interest rates during the nearly two-hour hearing that he volunteered to better define the “patient” policy in the final minute.

“When I say we’re going to be patient, what that really means is we’re in no rush to make a judgment about changes in policy,” he said. “We’re going to allow…the data to come in. I think we’re in a very good place to do that.”

Mr. Powell described the U.S. economy as healthy and the outlook as good, but he also pointed to headwinds from abroad. These include slower growth in China and Europe, political uncertainty over trade negotiations between Washington and Beijing, and the discussions surrounding the U.K.’s decision to leave the European Union.

“Over the past few months we have seen some crosscurrents and conflicting signals,” Mr. Powell said. “Right now, the predominant risks to our economy are slowing global growth.”

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