Mubasher TV
Contact Us Advertising   العربية

US economy remains strong but faces challenges – Fed head

US economy remains strong but faces challenges – Fed head

Mubasher: Federal Reserve chairman Jerome Powell said the US economy remained resilient, but it could face headwinds next year as policymakers consider the extent and the pace of interest rate hikes.

The goal is to “extend the recovery, expansion, and to keep unemployment low, to keep inflation low,” Powell said during a question and answer session in Dallas on Wednesday,

Policymakers are “well aware” of these issues, “[and] we think about those and kind of have a sense of what they might be,” Powell added.

While generally being optimistic about US economic outlook, Powell identified a list of potential challenges, including slowing demand growth abroad, fading fiscal stimulus and the effect of the Fed’s eight rate hikes since late 2015.

“I do believe our economy can grow and grow faster,” Powell said, adding that “we are absolutely committed to serving the public in a non-partisan, professional way, in a way that communicates what we’re doing and why we’re doing it as clearly as possible.”

The US economy grew at an annualised pace of 3.5% in the third quarter of this year, driven by higher consumer spending which in turn came on the back of the lowest unemployment rate since 1969.

In addition, Powell downplayed recent turmoil in the stock market, saying that despite the steepest slump in US equities since 2011 last October, the equity price changes were only one of the factors that the Fed put into consideration.

On a side note, chairman Powell emphasised that his move to hold press conferences following all of the eight Fed’s meetings in the next year would foster policy agility.

It would also shift the idea that the Fed could only change policy four times a year, Powell said.