Longer US government shutdown will hit economy, says Fed chief

Dow Jones Industrial Average Last 5 Days Source TradingView

Investors will be looking for new clues on US interest rate policy when Federal Reserve Chairman Jerome Powell speaks before the Economic Club of Washington on Thursday afternoon.

"I would expect them to repeat that the economy is strong", Scotiabank economist Derek Holt said.

"We're in a place where we can be patient and flexible", he said.

"It will be substantially smaller than it is now", Powell said Thursday at the Economic Club of Washington, adding that the balance sheet needs to be at a "more normal level" without clarifying what that level was. Yesterday the Australian share market closed 0.3 per cent higher or 17 points higher at 5,795. He said he didn't know the exact level.

Powell's second appearance in less than a week generated a subdued response in financial markets, a sign he may have found his footing in how to describe central bank policy without surprising investors. It would not want to wait too long to see overseas weakness affect the US economy, he added. The Fed's communications - and a Bloomberg News report that President Donald Trump had discussed firing Powell - helping bring on the worst December for stocks since the Great Depression.

United States central bankers are refining their message after the hawkish tone of their Dec 19 statement and forecasts for further rate hikes in 2019 roiled financial markets.

Speaking to an audience in Washington, D.C, Powell delivered the same reassuring message that bolstered markets last Friday.

He also said that the Fed had no preset path for rate hikes and would be "patient" when determining whether to hike interest rates further in response to strong USA growth that risks sparking inflation, or to pause rate hikes to account for a global economic slowdown.

The monthly reductions, effectively running on autopilot, have been criticized by some as a steady tightening of financial conditions the Fed should reconsider.

On Thursday, Powell said he hasn't seen anything to indicate that the risk of a recession is elevated.

JPMorgan Chase has estimated that the partial government shutdown - which is 20 days old Thursday - is shaving $US1.5 billion off the economy each week, a modest amount in the context of a $US20 trillion economy, the damage will keep growing. "The principal worry I would have is global growth". Rubenstein also hosts an interview show on Bloomberg Television.

While he has near weekly meetings with Treasury Secretary Steven Mnuchin, Powell said he has not met with Trump since taking over as Fed chairman, nor does he have any meetings with the president scheduled.

Related News:



Most liked

Details Over Top Sanders Advisor's Alleged Sexual Misconduct With Subordinate Emerge
The New York Times also has detailed allegations of unwanted sexual advances and pay inequity on Sanders' 2016 campaign. They added: "To be clear: no one who committed sexual harassment in 2016 would be back if there were a 2020 campaign".

Bus Driver Helps Baby Boy Found Wandering Alone On Freeway Overpass
Ivic quickly ran across the busy street, stopping traffic in the process, to grab the cold and crying child. The child, who was less than 1-year-old, was barefoot and wearing a onesie and diaper, according to MCTS.

How Meghan's baby may change her relationship with Kate
There have also been rumours Prince Harry and Prince William aren't as close as they once were. A NBC source told the Daily Star: 'We could be done in half a day or less.

Woman in Vegetative State for Last 14 Years Gives Birth
For example, an investigation in 2013 found that a staff member had made "inappropriate, sexual statements" about four clients. The news has been described as "deeply troubling" by a representative for Arizona Governor Doug Ducey.

As Bezos divorce unfurls, investors wonder - what does it mean for Amazon?
PEOPLE confirmed Sanchez is also divorcing her husband of 13 years, Patrick Whitesell . The Bezos - who met before Amazon struck it rich - didn't have a prenup, TMZ reports .

West Ham tell Arnautovic to honour contract
Arnautovic's brother, Danijel, has issued a statement claiming that West Ham bought him for "peanuts" and should let him leave.

Former Trump lawyer Michael Cohen to testify publicly before Congress
Rudy Giuliani, the former mayor of New York City and Trump's television defense lawyer, lashed out against Michael Cohen . In the interview with Stephanopoulos, however, Cohen rejected Trump's claims as "absolutely not true".

Marvel's "The Punisher" Season 2 Trailer Is Here
Criminal Minds actor Josh Stewart joins the cast as John Pilgrim, a new alt-right, Christian Fundamentalist villain. Season 2 will see the return of FBI Agent Dinah Madani ( Amber Rose Revah ) and Curtis Hoyle ( Jason R.

Chocolates, caramels sold nationwide may be contaminated with Hepatitis A
It can happen when an infected person prepares food without washing their hands, even if the person doesn't show signs of illness. But today, the firm announced a voluntary recall after a worker tested positive for hepatitis A, a highly contagious infection.

Transfer: Michy Batshuayi to return to Chelsea
Alemany's assessment heavily implies that Batshuayi will be moving to a different club on loan rather than returning to Chelsea. Premier League rules do not permit English top-flight clubs to loan more than one player to the same club.

Bronx Gets Priority in de Blasio's NYC Care Initiative
NYC Care will start rolling out in coming months and will take more than two years to be fully implemented, de Blasio said . The emergency room is the "default health care provider for so many people in this country", de Blasio said.

Apple CEO Tim Cook earned almost US$16 million in 2018
Cook said he wasn't surprised by the market reaction, calling it "quite emotional in the short term". "The services are on a tear".

China says trade talks with U.S. set foundation to resolve concerns
The USTR statement didn't say whether progress had been achieved on its main concerns. So far, the USA side has described the exchanges in a positive light.

IBM creates Q System One to sell quantum capacity
The IBM Q System One uses a motor-driven rotation around its two displaced axes to ease its maintenance and upgrade process. The company also earned patents for blockchain technology as well as for quantum computing uses.

Juventus organise signing ceremony for Arsenal midfielder Ramsey next week
The Wales global is Arsenal's longest-serving playing, having moved to the Emirates from Cardiff City as a teenager back in 2008. He won three FA Cups with the club, scoring the winning goal in the 2014 and 2017 final.