Federal Reserve Chairman Jerome Powell said the central bank can continue gradually raising interest rates as the outlook for growth remains strong, and the recent bout of financial volatility shouldn’t weigh on the U.S. economy.
“Some of the headwinds the U.S. economy faced in previous years have turned into tailwinds,” Powell said in written testimony to the House Financial Services Committee on Tuesday in Washington. “Fiscal policy has become more stimulative and foreign demand for U.S. exports is on a firmer trajectory.’’
Powell takes charge of the rate-setting Federal Open Market Committee at a time when the world’s largest economy may be shifting gear to faster growth, somewhat higher inflation, and declining unemployment. Adding to the momentum are tax cuts and spending increases agreed to by Republican lawmakers and signed by President Donald Trump.
“In gauging the appropriate path for monetary policy over the next few years, the FOMC will continue to strike a balance between avoiding an overheated economy and bringing PCE price inflation to 2 percent on a sustained basis,’’ he said, in his first public appearance before Congress as Fed chief.
The recent correction in the stock market and rising rates on U.S. government debt shouldn’t hamper growth, he said.
Source : Bloomberg