Federal Reserve Chairman Jerome Powell Says Economy is “Strong”, Keeps Interest Rates Fixed
Today June 19, 2019 Chairman of the Federal Reserve Jerome Powell gave a speech on the state of the United States economy, and discussed the Federal Open Market Committee’s (FOMC) plan to “sustain the [economic] expansion”(1). The FOMC reported “that the labor market remains strong and that economic activity is rising,… [while] job gains have been solid, on average, in recent months, and the unemployment rate has remained low” (1). The Committee said they plan “to foster maximum employment and price stability… [by maintaining] the target range for the federal funds rate at 2-1/4 to 2-1/2 percent” (1). Chairman Powell did express caution “in light of increased uncertainties and muted inflation pressures,… [and that they] will closely monitor the implications of [their rate decision] and will act as appropriate to sustain the expansion” with the goal of keeping “inflation near its 2 percent objective” (2). Powell referenced “raising concerns about the strength of the global economy,… drop in business confidence,… [and] heightened concerns over trade developments” as “the basis” for maintaining interest rates (2). The market reacted positively to the news that the interest rate will remain at 2.35 percent, with the S&P 500 rebounding 0.5% today to end the day green (3).