Powell said that there is no immediate threat to the economies health at this point. The FED will continue to gradually raise interest rates and that the labor market will remain strong. He then said it is too early to tell how the economy will react to the tariff. This is mainly because no one is completely sure the extent the tariffs will come into effect. He then moved to discuss the current economic strength saying the it is growing well with rises in income and high consumer confidence. It will be interesting to see just how the tariffs and impending trade war and varying economic policies will affect the economy in the near future.
Link to article:
https://www.nytimes.com/2018/04/06/business/economy/powell-federal-reserve-economy.html?rref=collection%2Fsectioncollection%2Fbusiness-economy&action=click&contentCollection=economy®ion=stream&module=stream_unit&version=latest&contentPlacement=4&pgtype=sectionfront
2 comments:
I am curious as to why the markets did so poorly following such a positive outlook.
I think consumer confidence if one of the most important factors. Although Powell believes it is high, if it is low there could be severe consequences of a self fulfilling prophecy.
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