FEBRUARY 17, 2020 – POWELL TO CONGRESS: ECONOMY ON TRACK
Jerome Powell spoke to the House Financial Services Committee last week, saying, “There is nothing about this economy that is out of kilter or imbalanced.” The chairman is satisfied with much of the economic data, noting that the expansion is well into its 11th year — the longest period of uninterrupted U.S. growth on record.
Powell thinks the US economy appears durable, growth is steady and unemployment near a 50-year low, but faces risks from the spreading virus in China. The Fed is monitoring developments stemming from the coronavirus, Powell cautioned it “could lead to disruptions in China that spill over to the rest of the global economy.”
He also said the Fed is comfortable with where interest rates are, suggesting that no further rate cuts would be considered unless economic conditions were to change significantly. The Fed has kept its benchmark short-term rate in a low range of 1.5% to 1.75%, well below levels typical during previous economic expansions. Powell said the Fed “believes that the current stance of monetary policy will support continued economic growth, a strong labor market” and annual inflation returning to the committee’s 2% target level.