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Home / Business / Jerome Powell reiterates ‘patient’ approach, shrinking of balance sheet

Jerome Powell reiterates ‘patient’ approach, shrinking of balance sheet



From the meeting, Fed officials indicated that they are less likely to continue collecting than their statement and the projections for two increases in 2019 had suggested.

Powell said last week to "listen carefully to the message that the markets are sending" of downside risks

The December meeting minutes released on Wednesday showed that many officials believed that the central bank "could afford to be patient for a further strengthening of the policy", indicating that the Fed could suspend interest rates until March or longer pending clarity on the risks to global growth that could affect the US economy .

The more flexible approach, evident in the minutes and in the last speeches, supported stock prices. Bloomberg's index of financial conditions has revisited much of its December hold.

On Thursday, Powell said he saw nothing to indicate that the risk of a recession is high. The partial closure of the government is unlikely to leave a mark on the short-term economy, although the Fed will have a less clear picture of growth without data from the Department of Commerce, which will release figures including retail sales and the product gross internal.

At the same time, Powell acknowledged that financial markets expressed concern about risks. The main concern is global growth, he said in the question of David Rubenstein, the co-founder of the private equity firm Carlyle Group, in which Powell was previously a partner. Rubenstein also hosts an interview on Bloomberg Television.

Powell also stated that he did not consider it appropriate to refuse an invitation to meet Trump, but has not yet received an invitation like that. The Fed presidents have met with presidents in the past, he added.

Fed policymakers have projected economic growth higher than the trend for this year in their December forecast, and expect the unemployment rate to fall further. These forecasts seem to be supported by a robust December report on the labor market, which showed that the economy added 31

2,000 non-farm jobs, the maximum in 10 months. The unemployment rate stands at 3.9% and central bankers expect an average of 3.5% in the last three months of this year

. Nevertheless, US central bankers face a difficult year that complicates their communication. Financial markets are incorporating a number of risks to the outlook, ranging from slowing global growth to the potential for a protracted trade war with China.

Bloomberg


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