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New York – The US economy is doing well and today justifies the continued interest rate hikes of the Federal Reserve . Jerome Powell speaking at the biannual congressional hearing on the state of expansion, painted an optimistic picture of growth, saying that in the second quarter he should have accelerated "considerably" the pace after a slowdown of 2% in the first Three months of the year
"The US economy – the president of the central bank said at the second meeting with the parliamentarians since he was in power – has so far experienced solid growth this year. " So much so that the Fed, when it comes to the monetary policy strategy, "for the moment believes that the best way forward is that of gradual increases" in the cost of money . Beside the positive judgment on the economy, this "for the moment" was accepted as a rebaduring signal on Wall Street of the constant caution and attention of the Fed not to interfere with the expansion.
Dazi, world trade tilt also for Donald Trump's false news
Since January, the Central Bank has triggered two quarterly cuts, the latest at the end of June, which brought the interbank rates, or on federal funds, between 1.75% and 2% per cent. And he has predicted so much by the end of the year, probably in September and December. Similar maneuvers, Powell added, are meant to "ensure that the current trend (economic, economic) continues."
The labor market, in particular, should be confirmed as a bastion of recovery. "Unemployment is low and is expected to come down again." Americans who want a place are likely to find it. "The jobless was 4% in June and the monthly job creation this year was 215,000, a figure more than solid.
Recently, even inflation, once considered a weak link in the expansion, has returned to the ideal goal of 2%, which Powell yesterday described as "encouraging Despite the fact that wages continue to languish (Powell mentioned among possible reasons a slowdown in productivity trends.)
along with "strong gains in jobs", we note "increases in income after tax, trust between households that pushed consumer spending 'and' business investments that have continued to progress in good health '. [19659008] Trade, signed the free trade agreement between the EU and Japan
The fiscal stimulus injection from the tax reform launched by the White House and Congress is expected to continue to play its role of growth driver in 2018. Even the real estate and construction sector even this year without jumps, compared to past years, show significant improvements. Overall, prospects are looking for balanced risks between the possibility of "unexpected weakness" and "growth ahead of current expectations". For the period between April and June, the Fed in Atlanta estimates that GDP growth has increased to 4.5%.
The Risks of a Trade War
Clouds of trade tensions, thickened in the battle for rights and counterpart triggered by Donald Trump's administration against rival powers (China) against allies (the EU) have not yet eroded the contribution of exports. "The good economic performance in other countries has helped exports and the US manufacturing sector," said Powell.
The president, however, warned: he said that for the moment it is "difficult to predict" what will be the ramifications for the economy of what he defined as "broad discussions on unprecedented trade ". And he went further: "In general, countries that have remained open to trade have grown faster," while "countries that have adopted a more protectionist direction have done worse." Powell hoped that the result of the current uncertainties would be the removal of barriers, warning that if they led to more obstacles in the way of trade in goods and services, this would harm both the United States and other countries. savings. .
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