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SÃO PAULO – Chairman of the Federal Reserve, Jerome Powell, this morning gives his testimony to the US Senate Banking Committee this morning, which will be followed by questions from members of Congress.
See the main points of the speech prepared by the President of the American Central Bank:
1- Current Economic Situation
"Since the last time I have witnessed here in February, the market of Work continued to grow stronger and inflation increased, with inflation exceeding 2% [meta do Fed] the level that the Federal Open Market Committee, or Fomc, thinks to achieve our best price stability and goals. long-term employment, the latter figure being motivated by a significant increase in gas prices and other energy prices "
" The data received show that, alongside the labor market, The economy The value of goods and services produced in the economy (gross domestic product) increased at a moderate annual rate of 2% in the first quarter after adjustment However, recent data suggest that the economic growth in the second quarter was significantly stronger than in the first quarter. The solid pace of growth so far rests on several factors. Robust job gains, rising after-tax income and optimism among families have increased consumer spending in recent months. Business investment continued to grow at a good pace. Good economic performance in other countries has supported US exports and manufacturing.
2 – Monetary Policy Outlook, the labor market remains strong and inflation is close to 2% in the coming years. This judgment reflects several factors. First, interest rates and financial conditions remain broadly favorable to growth. Second, our financial system is much stronger than before the crisis and is well positioned to meet the credit needs of households and businesses. Third, federal tax and spending policies will likely continue to support expansion. And, fourthly, the prospects for economic growth abroad remain strong despite the greater uncertainties in many parts of the world. "
3 – Orientations of the monetary policy
" With a market of a solid work, an inflation close to our objective and risks for the more or less balanced prospects, Fomc estimates that for At the moment, the best way forward is to continue to gradually raise interest rates. We are aware that, on the one hand, a too slow rise in interest rates can lead to high inflation or excesses in the financial market. On the other hand, if we raise rates too quickly, the economy could weaken and inflation could persist below target [de 2%]. The Committee will continue to weigh a wide range of relevant information when deciding which monetary policy will be appropriate. As always, our actions will depend on the economic outlook, which may change as we receive new data. "
4 – Uncertainty with Trade Warfare and Tax Expansion
" What I have just described is that we view as the most likely path to the economy . Of course, the economic results we experience are often much stronger or weaker than our best prediction. For example, it is difficult to predict the end result of the current trade policy discussions, as well as the size and timing of the economic effects of recent changes in fiscal policy. Overall, we see the risk that the economy will weaken unexpectedly, in more or less balanced terms, with the possibility that the economy will grow faster than we currently expect it to be. . "
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