On Thursday, Powell said he hasn’t seen anything to indicate that the risk of a recession is elevated. The partial government shutdown is unlikely to leave a mark on the economy in the short term, though the Fed will have a less clear picture of growth without data from the Commerce Department, which releases figures including retail sales and gross domestic product.
At the same time, Powell acknowledged that financial markets are expressing concern about risks. The principal worry is global growth, he said in questioning by David Rubenstein, the co-founder of private-equity firm Carlyle Group, where Powell was previously a partner. Rubenstein also hosts an interview show on Bloomberg Television.
Powell also said he didn’t think it would be appropriate to reject an invitation to meet with Trump, but he hasn’t yet received such an invitation. Fed chairs have met with presidents in the past, he added.
Fed policy makers projected above-trend economic growth for this year in their December forecasts, and they expect the unemployment rate to fall further. Those forecasts appear supported by a robust December labor-market report, which showed the economy added 312,000 non-farm jobs, the most in 10 months. The unemployment rate stands at 3.9 percent and central bankers expect it to average 3.5 percent in the final three months of this year.
Even so, U.S. central bankers face a challenging year that’s complicating their communication. Financial markets are incorporating a variety of risks to the outlook, ranging from slowing global growth to the potential for a protracted trade war with China.
This article was provided by Bloomberg News.