Economy

Powell says US Fed to act as appropriate to sustain US expansion

Powell says US Fed to act as appropriate to sustain US expansion

On Friday, the 6th of September 2019, Federal Reserve Chairman Jerome Powell had reiterated his vow to act as appropriate in order to sustain a decade-long expansion of United States economy at a speech in the University of Zurich, Switzerland, a global centre for finance and banking, holding out on to a phrase that global money markets were contemplating as a signal to further interest rate-cut ahead.

The US central bank is "not forecasting or expecting a recession", Mr Powell said in comments on a panel in Zurich on the heels of an August jobs report released in Washington that was mixed but somewhat assuaged fears of a recession.

At its last meeting in July, the Fed cut rates for the first time in a decade, lowering its key policy rate to a new range of 2 per cent to 2.25 per cent. Markets believe there is a near certainty that the Fed will cut rates for a second time at the September meeting.

Federal Reserve Chairman Jerome Powell stressed the importance of independent monetary policy on Friday.

Jerome Powell says consumer spending and support from monetary policy should help deliver economic growth between 2% and 2.5% this year.

Powell has for months faced increasing pressure from President Donald Trump, who has relentlessly demanded lower rates, and from the markets, with investors looking for any sign of relief amid increasingly worrying economic signals.

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"There was nothing out of the ordinary that would sway the market one way or the other to think there was something different about how he has been talking about the markets since Jackson Hole", said Justin Lederer, Treasury analyst and trader at Cantor Fitzgerald.

He said the USA labor market is in a "good place" and consumption in "good shape", and added that the Fed is not forecasting or expecting a recession.

"We're going to continue to watch all of these factors, and all the geopolitical things that are happening, and we're going to continue to act as appropriate to sustain this expansion", Powell said Friday in Zurich, Switzerland.

Trump has persistently criticized Powell, saying, as recently as Friday morning that he questioned his decision to pick the 66-year-old former lawyer and private-equity investor.

The Fed chief noted that the central bank is monitoring "significant risks", including global trade tensions, that could threaten this scenario. "Where did I find this guy Jerome", the president said via Twitter.

He added: "Our main expectation is not at all that there will be a recession". We are strongly committed to nonpolitical decision making. We serve all Americans regardless of their political party'. "The service sector has been strong", he said.


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