Federal Reserve Chair Jerome Powell: U.S. Economy ‘In Pretty Strong Shape’
Federal Reserve Chairman Jerome Powell said that the U.S. economy is “in pretty strong shape” as Americans face record inflation, gas prices, and a host of other hardships.
Speaking before a panel at a central banker forum on Wednesday, Powell said that the U.S. economy grew more than 5.5 percent over the past year since it reopened in the wake of the pandemic.
“We had expected this year that growth would moderate to a more sustainable path,” he said. “We also, of course, are raising interest rates, and the aim of that is to slow growth down so that supply will have a chance to catch up. We hope that growth can still remain positive.”
As noted by the Associated Press, Powell had proposed raising interest rates to “just enough to slow the economy and rein in surging consumer prices without causing a recession and sharply raising the unemployment rate.” However, Powell said there was “no guarantee” raising interest rates would help stave off a recession, adding that Russia’s invasion of Ukraine had complicated matters.
Nevertheless, the chairman said that U.S. households “are in very strong financial shape” due to what he referred to as “excess savings” or “forced savings from not being able to travel” during the pandemic.
“Households are overall, not every household, and not the ones at the lower end of the income spectrum, but overall, in strong shape,” he said. “The same is true of businesses, very low rates of defaults and things like that, lots of cash on the balance sheet.”
“The labor market is tremendously strong, still averaging very very high job growth per month. Overall, the U.S. economy is well-positioned to withstand tighter monetary policy,” he added.
Despite his overall positive outlook on the U.S. economy, Powell said that it may never return to pre-pandemic levels.
“The economy is being driven by very different forces. What we don’t know is whether we’ll be going back to something that looks like, or a little bit like, what we had before,” Powell said.
As Breitbart News reported, the American public does not share in Powell’s positive outlook on the shape of the U.S. economy, with over 85 percent saying it has gotten worse or will get worse.
https://www.breitbart.com/economy/2022/06/30/federal-reserve-chair-jerome-powell-u-s-economy-in-pretty-strong-shape/
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