Federal Reserve Chair Jerome Powell says the US central bank’s staff economists are no longer forecasting a recession given recent resilience in the economic data. He speaks at a news conference following the decision by the Fed’s policy-setting Federal Open Market Committee to raise its benchmark interest rate by 0.25%.

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Powell: Fed Staff No Longer Forecasting Recession

In a recent statement, Jerome Powell, the chairman of the Federal Reserve, revealed that the Federal Reserve staff is longer forecasting a recession in the foreseeable future. This news comes as a welcome relief to financial markets and the general public who have been concerned about the state of the economy amidst a global slowdown and ongoing trade tensions.

The Federal Reserve staff’s assessments and projections are critical for shaping monetary policy decisions. Their forecast of a stable and growing economy without a looming recession indicates that the current economic conditions are more optimistic than previously anticipated. This reassurance from the Federal Reserve sets a positive tone for both investors and businesses alike.

One major factor contributing to this change in forecast is the recent agreement between the United States and China on a phase one trade deal. The escalating tariff dispute between the two largest economies in the world has been a significant source of uncertainty and volatility in the global economy. With the trade deal, although limited in scope, the immediate threat of further trade tensions has diminished. This development has alleviated concerns around potential slowdowns in economic growth due to trade disruptions.

Furthermore, while global economic growth has slowed in recent months, indicators suggest that the U.S. economy remains resilient. Low unemployment rates, solid consumer spending, and robust business investment have all contributed to a healthy economic state. The Federal Reserve’s decision to cut interest rates three times in 2019 has also helped to bolster economic activity by reducing borrowing costs for businesses and consumers alike.

On a global scale, uncertainties stemming from Brexit and geopolitical tensions persist. However, the Federal Reserve’s statement implies that these factors are not likely to significantly impact the U.S. economy as previously feared. Powell’s reassurance can help stabilize markets and encourage businesses to continue investing and hiring.

Nonetheless, it is important to note that while the Federal Reserve staff no longer forecasts a recession at this time, economic conditions can change rapidly. Unexpected events, such as geopolitical conflicts, policy changes, or even natural disasters, can shift the economic landscape. Powell emphasized that the Federal Reserve will continue to closely monitor these risks and remain vigilant in its efforts to sustain economic stability.

Overall, Powell’s statement provides a positive outlook for the U.S. economy and global markets. The improved forecast from the Federal Reserve staff, coupled with the resolution of the U.S.-China trade dispute, offers reassurance to businesses and investors. However, it is essential to recognize the inherent uncertainties and potential risks that may still lie ahead. The Fed’s commitment to closely monitoring the economic landscape ensures that appropriate measures can be taken if necessary, to maintain a healthy and stable economy.