[WASHINGTON] Despite solid growth and continuing job gains, the US economy will see inflation fall even further below the central bank's two percent goal, at least for a time, Federal Reserve Chairman Jerome Powell said on Tuesday.
The US central bank increased the key policy interest rate four times last year but rising uncertainty, especially around the US trade confrontation with China, amplified concerns about slowing global growth and fears the Fed was moving too aggressively.And with no sign of rising inflation, that prompted the Fed to signal clearly for the past several weeks that it would tread carefully.
But the muted inflation pressures and risks on the horizon mean"this is a good time to be patient and watch and wait and see how the situation evolves," he said in response to a question. But President Donald Trump on Monday said he expected to hold a"signing summit" soon with China's leader Xi Jinping to resolve the issue and he pushed back a March 1 deadline which would have triggered tariffs to more than double on US$200 billion in Chinese exports.
However, longer-run trends,"such as relatively stagnant incomes for many families and a lack of upward economic mobility among people with lower incomes, also remain important challenges," he said.
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