It has been a steady growth in the United States will continue for "many years": Jerome Powell

WASHINGTON.- The President of the United States Federal Reserve Jerome Powel said Tuesday that the country's economy would benefit for "several more years" at the top of one's life. strong labor market and with inflation close to the 2% target of the central bank, without taking into account the effects of a trade war.

In a written testimony to be given to the Senate Banking Commission on Tuesday, the Fed chief indicated that not only does he believe the economy is working well, but that the era of steady growth will continue, as long as the body is able to make the appropriate decisions.

"With proper monetary policy, the labor market will remain strong and inflation will remain close to 2% for several years," said Powell, in one of his most affirmative statements. to date that the Fed would comply with its dual mandate for the first time in a decade after the US recession.

Jerome Powell also said that the central bank will continue to raise interest rates gradually "for the time being" to keep inflation close to the target in a strong labor market in the states -United.

The Fed panel that sets interest rates "believes that, for now, the best way to do this is to continue to gradually increase the federal funds rate," Powell said.

On one side, a too slow rise in interest rates can result in high inflation or excesses in financial markets, "Powell said in the text." Other On the other hand, if we raise rates too quickly, the economy could weaken and inflation could remain consistently below our target. "

Powell's congressional address with the fundamentals of US expansion with a solid appearance. Unemployment is close to a minimum of 18 and inflation is around the 2% target of the Federal Reserve, although some confidence indicators are starting to show warning signs of growing trade conflicts. He will be appearing before the House Financial Services Committee on Wednesday.

P not gradual

Officials in June said that they plan to continue to increase rates at a gradual pace, indicating two quarter-point increases by 2018. Powell's emphasis that the incremental increases are the right way "for now" may suggest the Committee's debate on suspending these hikes once the rate approaches a level that it considers to be neutral, should not add stimulus nor harm the growth.

Powell listed four reasons why the job market will remain strong with inflation close to the Fed's 2% target "in the coming years".

Financial conditions remain favorable for growth, he said, and a stronger financial system is being prepared to meet the credit needs of the economy.

"It is likely that tax and spending policies will continue to support expansion," Powell said, and "the prospects for economic growth abroad remain strong despite the heightened uncertainties in various parts of the world ".

Trade tensions

Powell also warned that it is "difficult to predict" how trade tensions, as well as "the size and timing of the economic effects of recent changes in fiscal policy" will shape the economic outlook. The risks of a weaker or stronger economy are "more or less balanced," he said.

The US economy grew at an annual rate of 2% in the first quarter and this rate is expected to double to 4% in the second quarter, according to analysts surveyed by Bloomberg.

In the midst of a booming job market, employers created 1.3 million new jobs in the first six months of the year and incomes began to rise more broadly.

Powell reiterates his intentions, announced at his June press conference, to explain the actions of the central bank with "clear and open communication".

"We owe you, and the public at large, clear explanations of what we do and why we do it," he told the Senate committee.

Powell, a former private banker, was appointed president of the Fed by President Donald Trump and took office in February. He was initially appointed to the Board of Governors by Barack Obama in 2012.

With information from Reuters and Bloomberg.