Powell Says Fed Is 'Waiting and Watching' With Patience on Rates

A key measure of US inflation was little changed in December while falling energy prices dragged down the broader gauge, giving the Federal Reserve little urgency to raise interest rates soon as it signals a more cautious approach in 2019.

At the Economic Club of Washington, Powell reiterated the views of other policymakers that the Fed would be patient about interest rate hikes. "The U.S. economy is solid and there's good momentum going into this year".

Federal Reserve vice-chairman Richard Clarida said the central bank should be ready to adjust monetary policy if headwinds to the economy from financial markets or global growth prove persistent, suggesting caution about moving ahead with interest-rate increases.

The balance sheet "will be substantially smaller than it is now", though bigger than it was before the crisis, Powell said. In contrast, his remarks in his three previous appearances since late November moved stocks an average of 2.4 percent in either direction, and his comments last Friday spurred the largest market reaction yet to any of his 17 public appearances since taking office last February. In October, it rose 0.3 percent.

The us Central Bank, the Federal Reserve has pressed the pause button.

Powell on Thursday also reiterated that, separate from what happens with interest rates, the Fed would continue allowing its almost $4 trillion portfolio of bonds to shrink each month, to a level "substantially smaller" than it is now. "That was conditional on a very strong outlook for 2019", which may or may not materialize, with the Fed adjusting policy accordingly.

More news: Brexit: MPs defeat government over no-deal preparations

While there is wide agreement that the United States economy will grow more slowly than the roughly 3 per cent rate of 2018, there's a lot of debate about how fast the slowdown will be.

Despite his largely upbeat view on the USA economy, and clear signals the Fed will be patient about raising interest rates any higher - statements that helped equities to recovery - markets focused on those two words.

"There is no pre-set path for rates. particularly now", he said.

The central bank lowered its projections on the number of rate hikes in 2019 from 3 to 2 during the latest rate hike announcement.

During an interview at The Economic Club of Washington, D.C., Powell said that continued shutdown stopped some of the data feed that the Fed needed, making the outlook of US economy less clear, thus complicating policy-making. "The principal worry is global growth", he said.

The partial government shutdown is unlikely to leave a mark on the economy in the short term, though the Fed will have a less clear picture of growth without data from the Commerce Department, which releases figures including retail sales and gross domestic product.

(Copyright © 2015. All Rights Reserved.)
 
Recommended

EPL: Kane keeps Tottenham in title hunt with Cardiff romp
Paul Merson is backing Tottenham Hotspur to return to winning ways on New Year's Day when Spurs take on Cardiff City at Wembley. The England striker has now scored 16 goals in his last 12 Premier League away matches against newly-promoted teams.

Tesla triples deliveries of electric cars but share price tumbles
Ahead of the price cut announcement , chief executive Elon Musk urged Tesla customers to make use of federal tax credits. The company's production grew to 86,555 vehicles, up 8 per cent from the high set in the past quarter.

North Korea to adopt new path if sanctions kept: Kim
The young North Korean leader also called on Washington and Seoul to end the joint military drills between the two countries. That could mean working with China, South Korea and others in pressing Washington, professor Kim said.

Klopp expects adapting Keita to be more influential at Liverpool
There's a bet I really like ahead of this game, and it's the straightforward Liverpool win at a scarcely believable [2.04]. I prefer to be in this position. "It is so good and I am looking forward to our common future", he said.

America's once-beautiful national parks ar
If you see trash on the ground at one of the parks or areas maintained by NPS please pick it up and help dispose of it. Children were sledding down hills and cross country skiers seemed to have the park all to themselves.

Jermain Defoe set to sign for Rangers from Bournemouth
Redknapp knows Defoe well having signed him as a 15-year-old for West Ham, then twice more in his career for Portsmouth and Tottenham Hotspur.

China targeting Canadians since Huawei exec's arrest
State Department notice warns that China sometimes arbitrarily detains U.S. citizens or prevents them from leaving the country. McIver is one of the eight Canadians who have been released, although Kovrig and Spavor continue to be held by China.

Netflix Reveals ‘Stranger Things’ Season 3 Release Date in Cryptic Trailer
The minute-long New Year themed teaser features archival footage of Dick Clark's New Year's Rockin' Eve from 1984. In a new teaser, the streaming network revealed that the 1980s-set series will officially return on July 4, 2019.

Actor Kevin Spacey pleads not guilty to sex assault charge
The civil attorney for the accuser said in a statement ahead of the hearing that his client is "leading by example". Later that day, the actor released video in which he appeared as his House of Cards character Frank Underwood .

Meghan supports women and animals with first royal patronages
It was set up in 2013 with the aim of providing long term unemployed women with the tools they need to get the job they want. Queen Elizabeth gifted the estate to Prince Harry and Meghan Markle . "I thought it was great", she added with a laugh.

Deputy US Attorney General Rosenstein expected to resign in weeks
Dianne Feinstein, D-Calif., the ranking member of the Judiciary Committee, when Barr's nomination was announced. Barr wrote a memo in June critical of Mueller's potential investigation into obstruction of justice by Mr.

WR John Brown wants long-term deal to return to Ravens in 2019
It's not your typical 1-6 matchup in the National Football League playoffs, as the game is incredibly winnable for both teams. Flacco , the former Super Bowl MVP, was benched in favor of Jackson after their bye in Week 10 and on the sideline Sunday.

Aunt: Jayme Closs escaped, found woman walking dog
As they waited for authorities, Jayme declined food and water, and instead met the family's puppy. "I just can't wait". Friday in Barron. "I've been in the dumpster for three months". "I knew it was her the second she walked in the door".

Poland arrests Chinese businessman, Pole on spying charges
Local media identified the firm as Huawei Technologies Co and said the suspect was the sales director of its office in Poland. According to local media, the Chinese businessman is believed to be one of the directors of the Polish branch of Huawei .

Canadian 'Fiji Water Girl' photobombs stars at Golden Globes
Jamie Lee Curtis isn't pleased with the "Fiji Water Girl" stealing the show on the 2019 Golden Globes red carpet on Sunday. In a move no one could have predicted, " Fiji Water Girl" proved the unlikely star at this year's Golden Globes .


More News

News
More News