Fed’s Powell forecasts solid but slower USA economic growth in 2019

Anna Jefferson
March 3, 2019

Powell explained at a January 30 press conference that headwinds including slower growth overseas, tighter financial conditions, and the cumulative impact of past policy tightening "warrant a patient, wait-and-see approach" to the central bank's next rate move.

Powell's prepared testimony before the House panel was identical to his remarks Tuesday before the Senate Banking Committee.

"The rand has, along with emerging markets, held steady on Powell indicating that due to uneven global growth dynamics, the FOMC would be patient with respect to interest rate adjustments; more testimony is to follow today", Nedbank analysts said in a note.

"While we view current economic conditions as healthy and the economic outlook as favourable, over the past few months we have seen some crosscurrents and conflicting signals", Powell said, adding that the central bank is monitoring how Brexit negotiations and Sino-U.S. trade talks play out.

India demands Pakistan release pilot as Kashmir crisis intensifies
I am happy that they have taken note of this rising tension and they want to play a constructive role to deescalate. Residents of the Pakistani border town of Chikhoti reported heavy shelling overnight and Friday morning.

"The one on MBS sales is really closer to the back of the line - really we have to decide about the maturity composition, things like that, and we'll be working through that in a very careful way", Powell said.

The central bank boosted its holdings by more than four-fold in the wake of the 2008 financial crisis and subsequent recession, in an effort to lower long-term interest rates as it looked for unconventional ways to boost economic growth.

Powell's comments came in response to a question from Rep. Al Green, D-Texas, who noted that President Donald Trump had attacked the Fed's interest rate decisions repeatedly past year. He noted the Fed will be in a position to stop the runoff "later this year".

Further, global debt yields took a slide following strong investors demand worth of $32 billion at the 7-year US note auction held late yesterday.

Top ally supports embattled Canada PM, easing pressure for now
Michael Wernick, the top civil servant in the government, has also said that no inappropriate pressure was put on Wilson-Raybould. The Montreal engineering giant was, and is, facing charges of fraud and corruption related to attempts to get business in Libya.

The Fed in December projected that it could raise rates two times in 2019. He said he would closely watch emerging risks, including a slowdown in growth in China, Europe and elsewhere, and a severe bout of instability that hit the stock market in the final three months of previous year.

John Higgins, chief market economist at Capital Economics, believes the dollar will continue to benefit from safe-haven flows this year even though investors start to price in rate cuts in 2020.

"I think the markets became much more sensitive to these issues", Powell said.

Federal Reserve Board Chair Jerome Powell gestures while speaking before the House Committee on Financial Services hearing on Capitol Hill in Washington, Wednesday, Feb. 27, 2019.

India says it shot down one Pakistan fighter jet
Father of captured Wing Commander Abhinandan Varthaman served as AOC-in-C of the Eastern Air Command on August 1, 2011. Late Tuesday, Pakistan reportedly shelled Indian territory in Kashmir, and India retaliated early Wednesday.

Andrew Hunter, a senior US economist at Capital Economics, said he believes a slowing economy will prompt the Fed to leave rates unchanged this year and to start cutting them next year. Trump charged that the Fed's string of rate hikes had triggered the big declines in stock prices and were a mistake because inflation was not a threat.

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