Federal Reserve Chairman Jerome Powel revealed the Federal Open Market Committee (FOMC) brought the prediction down to two rate hikes in 2019 from three in light of the quarter percent rate hike announced Wednesday afternoon.
“Many FMOC participants had expected that economic conditions would likely call for about three more rate increases in 2019,” he told reporters in a post-announcement press conference. “We have brought that down a bit and now think it is more likely that the economy will grow in a way that will call for two interest rate increases over the course of next year.”
The Fed chair said, “Many FMOC participants had expected that economic conditions would likely call for about three more rate increases in 2019.”
“In early 2018, we saw a rising trajectory for growth,” Powell said. “Today instead we see growth moderating ahead.” He added, “The additional tightening of financial conditions we have seen over the past couple of months along with signs of somewhat weaker growth abroad have also led us to mark down growth in inflation growth a bit.”
The FMOC is predicting three percent growth for 2018 and 2.3 percent for 2019. Powell predicted a continued reduction in the unemployment rate, falling to a predicted 3.5 percent by 2019 end.
Powell asserted 2018 growth coupled with the Fed’s four interest rate hikes over the past year will boost the 2019 economy by a smaller margin than 2018. The FMOC will be “watching the economy closely for indications that the stance of policy is appropriate to sustain the expansion with a strong labor market and inflation near 2%,” according to the chair.
He emphasized that “the summary of economic projections is a compilation of the individual projections of all FMOC participants” and not a consensus judgment. “We project to the median of these to illustrate the broad view of each participant’s projection represents appropriate policy under the baseline outlook provided by that participant.”
“Neither the pace, nor the ultimate destination of any further rate increases is predetermined,” he clarified. “We will adjust monetary policy, as best we can, to keep the expansion on track, the labor market strong, and inflation near 2%.”
“We know that our policy decisions affect all American families and businesses, and will continue to make our decisions objectively, and based solely on the best information and analysis,” said Powell.
Michelle Moons is a White House Correspondent for Breitbart News — follow on Twitter @MichelleDiana and Facebook
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