Powell sees no indication of economic recession on the horizon

Powell sees no indication of economic recession on the horizon

During a conference in San Francisco, Federal Reserve Chair Jerome Powell expressed that the U.S. economy is still going strong and there is no indication of a recession on the horizon. Despite predictions of a possible recession in 2022, the U.S. economy has been performing well over the past year and a half, with inflation decreasing without causing a major economic downturn.

In June 2022, inflation peaked at 9.1 percent but has since fallen to 3.2 percent, showing signs of improvement. Even with the Fed raising interest rates to combat inflation, the labor market has remained robust. In February, the economy added 275,000 jobs and the unemployment rate stayed below 4 percent, maintaining a streak not seen since the late 1960s.

The Federal Reserve chose to keep interest rates steady at its most recent meeting, with Powell emphasizing the need for more positive data before considering a rate cut. While inflation has eased and the labor market is strong, Powell warned that inflation is still too high and progress is uncertain. However, inflation data released on Friday, including a slight increase in the personal consumption expenditures (PCE) price index for February, aligned with the Fed’s expectations.

Powell expressed confidence that inflation will gradually decrease, although the path forward may be bumpy. Overall, the U.S. economy has shown resilience and the Federal Reserve is monitoring the situation closely to ensure continued economic stability.

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