The Daily Update - Patient Powell

Don't expect to see more interest rate hikes from the Federal Reserve anytime soon, Fed Chairman Jerome Powell suggested to ‘60 Minutes’ in an interview that aired Sunday night on CBS. Powell, the frequent target of criticism by Trump, also added he can't be fired by the leader of the free world and that he intends to serve out his full four-year term. Powell believes ‘Inflation is muted and our policy rate we think is in an appropriate place’ adding ‘Patient means that we don’t feel any hurry to change our interest rate policy’ saying the current rate is roughly neutral. He went on to say ‘We’ve seen a bit of slowing, but still to healthy levels in the U.S. economy this year’ however believes ‘there’s no reason why this economy cannot continue to expand’.

When Powell was quizzed on what it would take for the Fed to moves rates he replied that they were looking at inflation, job creation, wages and growth, whilst keeping a watchful eye on ongoing international events. ‘We’ll be putting that all together and deciding when it will be appropriate to change our policy’ cautioning ‘What’s happened in the last 90 or so days is that we’ve seen increasing evidence of the global economy slowing down and we’re going to wait and see how those conditions evolve before we make any changes to our interest-rate policy’.

Powell was asked whether the Fed’s decision to pause on interest-rate hikes was due to pressure from the White House. ‘We will never, ever take political considerations into effect’ he said. He was also asked about Trump’s direct criticism of him, especially Trump’s belief that he was ‘a gentleman who likes raising interest rates’ and whether he could lose his job. He very diplomatically replied ‘I don’t think it’s appropriate for me to comment on the president’ whilst insisting ‘The law is clear that I have a four-year term. And I fully intend to serve it’.

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