Federal Reserve Chairman Jay Powell said he did not see any immediate pressure for tinkering with US interest rates in 2020 after the central bank left rates unchanged for December citing strong economic and labor market growth despite the ongoing US-China trade war
WASHINGTON (Pakistan Point News / Sputnik - 12th December, 2019) Federal Reserve Chairman Jay Powell said he did not see any immediate pressure for tinkering with US interest rates in 2020 after the central bank left rates unchanged for December citing strong economic and labor market growth despite the ongoing US-China trade war.
"We see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook of moderate economic growth, a strong labor market, and inflation near our symmetric 2 percent objective," Powell said in a statement on Wednesday as the Federal Reserve left rates steady at 1.5-1.75 percent.
Powell, however, said the Federal Reserve would continue to monitor weakness abroad and trade tensions.
His comment comes amid the 17-month old US-China trade war that has caused various sorts of market and economic stress through hundreds of billions of dollars tit-for-tat tariffs.
"We will be monitoring the effects of our policy actions, along with other information bearing on the outlook, as we assess the appropriate path of the target range for the federal funds rate," Powell said in his speech. "Of course, if developments emerge that cause a material reassessment of our outlook, we would respond accordingly. Policy is not on a preset course."
But asked at a news conference later on whether there would be rate changes in 2020, he replied: "In order to move rates up, I would want to see inflation that is persistent, that is significant, before raising rates to address inflation concerns. That is my view."
In a separate statement on the December rate policy decision, the Federal Reserve said its Federal Market Open Committee was guided by strong economic and labor market conditions.
"The Committee judges that the current stance of monetary policy is appropriate to support sustained expansion of economic activity, strong labor market conditions, and inflation near the Committee's symmetric 2 percent objective," the Federal Reserve statement said.
The US economy added 266,000 jobs in November, the Labor Department announced last week, beating market expectations for just 184,000 new jobs. The unemployment rate fell to a 50-year low of 3.5 percent from 3.6 percent previously, the department said.
Prior to Wednesday's decision, the Federal Reserve cut rates three times back-to-back between July and October, reducing a quarter percentage point each time.