Fed's Powell: US inflation to fall further below target

Fed Powell Testimony Reiterates Patience on Rate Hikes USD Muted

Fed Powell Testimony Reiterates Patience on Rate Hikes USD Muted

He described a training program in West Virginia, where women who participated lost "the meager benefits they were already getting" because many United States aid programs end as soon as the recipients find jobs. "He's made comments about the Fed having an exchange rate objective in order to support his trade plans, or possibly targeting the U.S. balance of trade", she said.

The U.S. GDP is now about $20 trillion, suggesting the Fed's balance sheet would be between $3.2 trillion and $3.4 trillion.

In it, he says that the Fed intends to take a "patient approach" in determining future hikes to its benchmark interest rate and will be closely watching risks to the economy such as a slowdown in global growth. As recently as a few months ago it had expected to keep shrinking its portfolio for another couple of years.

Noting the Fed's preferred annual inflation measure sits at 1.7 percent, Powell said "the extent and timing of any further rate increases would depend on incoming data and the evolving outlook".

The US central bank increased the key policy interest rate four times previous year but rising uncertainty, especially around the US trade confrontation with China, amplified concerns about slowing global growth and fears the Fed was moving too aggressively. Powell said he expects a decision on the reduction soon, but no definitive time was set.

"We are not looking at a higher inflation target, full stop", Powell said. "Markets are sensitive to this".

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In two hours of testimony to the Senate Banking Committee, Powell elaborated on the "conflicting signals" the Fed has tried to decipher in recent weeks, including disappointing data on retail sales and other aspects of the economy that contrast with steady hiring, wage growth, and ongoing low unemployment.

Powell's remarks on the balance sheet came toward the end of more than two hours of testimony before the Democrat-led House panel that includes several newly elected members, including New York Democrat Alexandria Ocasio-Cortez.

When asked if she thought that the president had a grasp of macroeconomic policy, Ms...

Federal Reserve Board Chair Jerome Powell gestures while speaking before the House Committee on Financial Services hearing on Capitol Hill in Washington, Wednesday, Feb. 27, 2019.

Fed officials stepped back from their plan to raise interest rates twice this year following a steep drop in stocks after their December policy meeting.

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