Federal Reserve Chairman Jerome Powell declared 2018 the “best year since the financial crisis” after revealing a late 2018 quarter percent rate hike Wednesday.
In a post-announcement press conference, Powell pointed to record low unemployment and low and stable inflation before explaining how the Fed has incorporated currents that have emerged since the September FMOC meeting. He noted a continually growing economy in line with expectations and adding jobs at a rate supporting a continued lowering of the unemployment rate.
“Wages have moved up for workers across a wide range of occupations, a welcomed development,” said Powell. “Inflation has remained low and stable, and is ending the year a bit more subdued than most had expected.”
“We will adjust monetary policy, as best we can, to keep the expansion on track, the labor market strong, and inflation near 2%,” he went on.
“If you look at 2018, as I mentioned, this is the best year since the financial crisis,” said Powell. “You have had growth well above trend. You got unemployment dropping. You got inflation moving up to 2%, and we also have a positive forecast, as I mentioned and in that context, we think this move was appropriate for what is a very healthy economy.”
The Fed chief went on to say policy could move to neutral as opposed to being accommodative. “It seems appropriate that it be neutral. We are now at the bottom end of range of estimates of neutral and that’s the basis upon which we made the decision,” he said. “I think we took on board, you know, the risks to that, and, you know, we’re certainly cognizant of them.”
The Fed announced it was raising the interest rate bracket a quarter percent, up to 2.25 to 2.50 percent on Wednesday afternoon. It was coupled with a reduction in predicted 2019 interest rate raises to just twice.