Fed's Powell Delivers Report to Congress

Says US economy will likely experience solid but slower growth in 2019
By Newser Editors and Wire Services
Posted Feb 26, 2019 2:05 PM CST
Powell Tells Congress Fed Will Continue to Be 'Patient'
Federal Reserve Chairman Jerome Powell testifies before the Senate Banking, Housing and Urban Affairs Committee on monetary policy on Tuesday, Feb. 26, 2019 on Capitol Hill in Washington.   (AP Photo/Kevin Wolf)

Federal Reserve Chairman Jerome Powell told Congress on Tuesday the US economy should keep expanding at a solid, though somewhat slower pace this year. But he warned of growing risks, including a global slowdown, volatile financial markets, and uncertainty about US trade policy. In delivering the Fed's semiannual monetary report to Congress, Powell said the Fed will be "patient" in determining when to boost its benchmark policy rate in light of the various "crosscurrents and conflicting signals," the AP reports. "When I say that we are going to be patient, what that really means is that we are in no rush to make a judgment about changes in policy," Powell said in response to questions from lawmakers on the Senate Banking Committee. "We are going to be patient. We are going to allow the situation to evolve ... and allow the data to come in. And I think we are in a good place to do that."

The Fed in December indicated it could hike rates two times this year. But many private economists believe the Fed will keep rates unchanged until late this year and may not hike at all. In his testimony, Powell said that the economy grew at a strong pace last year, with employment and inflation remaining close to the Fed's goals. He said it appeared that overall growth was slightly below 3% in 2018. The Fed expects 2019 growth to slow somewhat. He said that while the 35-day partial government shutdown "created significant hardship for government workers and many others, the negative effects on the economy are expected to be fairly modest and to largely unwind over the next several months." Powell's Senate testimony will be followed by an appearance Wednesday before the House Financial Services Committee. (More on Powell's testimony and private economists' predictions here.)

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