Fed Chair Powell: Policy likely appropriate, barring material reassessment
|Jerome Powell, Chairman of the Federal Reserve, will say that the current policy of the bank is appropriate barring a material reassessment. The Fed is closely monitoring the coronavirus risks that could cause disruption at the epicenter of the disease in China and could have spillovers.
Powell is upbeat on the economy, saying that fundamentals are supporting household spending are still strong. Economic activity has increased in the second half of 2019 and the economy is showing resilience to global headwinds.
Inflation is set to move closer to the 2% goal in the coming months.
EUR/USD has dipped below 1.09 ahead fo the publication and the greenback retains its strength in general.
Key takeaways
"Fed will respond accordingly if developments emerge to cause a material reassessment of the outlook."
"Economic activity increased at moderate pace in the second half of 2019 as economy appeared resilient to global headwinds."
"Fundamentals supporting household spending remain solid; business investment and exports have been weak, largely reflecting sluggish growth abroad and trade developments."
"Some uncertainties around trade have diminished recently but risks to the outlook remain."
"Fed is closely monitoring the coronavirus which could lead to disruptions in china that spill over to the global economy."
"Fed expects inflation to move closer to 2% over the next few months as unusually low readings from early 2019 drop from the 12-month calculation."
"Finding ways to boost labor force participation and productivity should remain a national priority."
"Low-interest rate environment may limit the ability of central banks to reduce policy rates enough to support economy during downturn."
"A more sustainable federal budget path would give policymakers space to use fiscal policy in a downturn and support the economy's growth over the longer term."
"Treasury bill purchases, repo operations have been successful in providing ample reserves to the banking system."
"Fed intends to gradually transition away from active use of repos."
"Measures are not intended to represent a change in the stance of monetary policy; fed stands ready to adjust operations as conditions warrant."
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.