Apple News Facebook Twitter 新浪微博 Instagram YouTube Thursday, Nov 14, 2019
Search
Archive
English>>

U.S. Fed chairman says current monetary policy "likely to remain appropriate"

(Xinhua)    10:31, November 14, 2019

U.S. Federal Reserve Chairman Jerome Powell testifies before the Joint Economic Committee of Congress on economic outlook on Capitol Hill in Washington D.C., the United States, on Nov. 13, 2019. The current stance of U.S. monetary policy is "likely to remain appropriate" as long as the U.S. economy stays on track, Jerome Powell said on Wednesday at a hearing held by the Joint Economic Committee of Congress. (Photo by Ting Shen/Xinhua)

WASHINGTON, Nov. 13 (Xinhua) -- The current stance of U.S. monetary policy is "likely to remain appropriate" as long as the U.S. economy stays on track, U.S. Federal Reserve Chairman Jerome Powell said on Wednesday at a hearing held by the Joint Economic Committee of Congress.

"We will be monitoring the effects of our policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate," Powell said before the committee, a panel with some members from both the U.S. House of Representatives and Senate.

Noting that "policy is not on a preset course," Powell said the Fed would respond accordingly "if developments emerge that cause a material reassessment of our outlook."

When asked "do you anticipate maintaining the current Fed rate through the next year," the central bank chief responded "I know I wouldn't say that at all," and then turned to his prepared speech and basically repeated the remarks above.

Powell's remarks came one day after the U.S. President Donald Trump renewed his criticism of the Fed's monetary policies, saying that the central bank's hesitation in lowering the interest rates impeded U.S. economic growth and capped gains in the stock market.

Analysts said Powell's remarks at the Congressional hearing suggest that the central bank is unlikely to adjust interest rates anytime soon as long as the U.S. economy remains along its present path.

The U.S. economy expanded at an annual rate of 1.9 percent in the third quarter of the year, slightly lower than the 2-percent growth rate in the second quarter, according to the Commerce Department.

The Fed has already lowered rates three times since July, amid growing risks and uncertainties stemming from trade tensions, weakness in global growth and muted inflation pressures. These policy adjustments put the current federal funds rate target range at 1.5 to 1.75 percent.

"Tariffs, but to an even greater extent, uncertainty around future trade policy" has been weighing on business sentiment, and it's probably part of the global slowdown in manufacturing, in business investment, in exports and in trade, Powell said.

Inflation continued to run below the Fed's symmetric 2 percent objective, said the chairman. Core personal consumption expenditures (PCE) inflation, which excludes food and energy prices and the Fed's preferred inflation gauge, was 1.7 percent over the 12 months ending in September.

Despite an overall favorable baseline for the U.S. economy, the central bank chief pointed out several "noteworthy risks" to the economic outlook, including sluggish growth abroad, trade developments and persistent below-target inflation.

At the Congressional hearing, the Fed chairman also highlighted the importance of fiscal policy, noting that the federal debt is on an unsustainable path. "The debt is growing faster than the economy" in nominal terms, Powell said.

"Over time, this outlook could restrain fiscal policymakers' willingness or ability to support economic activity during a downturn," he said. "In addition, I remain concerned that high and rising federal debt can, in the longer term, restrain private investment and, thereby, reduce productivity and overall economic growth."

The Fed chairman also said that the country faces longer term issues around labor force participation and productivity, noting that U.S. labor force participation lags most of the other advanced economies.

(For the latest China news, Please follow People's Daily on Twitter and Facebook)
(Web editor: Liang Jun, Bianji)

Add your comment

Most Read

Hot News

We Recommend

Photos

prev next