55
FED CHAIR
DISCUSSES
RECESSION,
ECONOMIC
EXPANSION
During the first part of Federal Reserve
Chair Jerome Powell's Monetary Policy
Report, Powell reported that the U.S.
Economy is currently in a "very good place,"
citing the 11th consecutive year of economic
expansion, as well as a moderate increase in
activity and a strengthened labor market.
Powell has said that he does not believe
that the markets are at risk of a recession.
"I don't think so and I certainly hope
not," Powell said. "ere's no reason why the
expansion can't continue. ere's nothing
about this expansion that is unstable or
unsustainable."
On monetary policy, Powell noted that the
Federal Open Market Committee (FOMC)
believes that the current stance of monetary
policy will support continued economic
growth, a strong labor market, and inflation
returning to the Committee's symmetric 2%
objective.
"Taking a longer view, there has been a
decline over the past quarter-century in the
level of interest rates consistent with stable
prices and the economy operating at its full
potential," Powell said. "is low interest rate
environment may limit the ability of central
banks to reduce policy interest rates enough
to support the economy during a downturn.
With this concern in mind, we have been
conducting a review of our monetary policy
strategy, tools, and communication practices.
"Public engagement is at the heart of this
effort," he added.
During his testimony, Powell also noted
that the Fed will be "closely monitoring" the
coronavirus and its impact on global economic
growth. Despite the threat from the virus, he
said Fed policy is well positioned after a series
of rate cuts in 2019.
"As long as incoming information about
the economy remains broadly consistent with
this outlook, the current stance of monetary
policy will likely remain appropriate," he said.
