Longer US government shutdown will hit economy, says Fed chief

Consumer credit outstanding

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

Sheriff says missing Wisconsin teen Jayme Closs has been found alive
Autopsies determined the two died of gunshot wounds and were murdered, and that Closs was inside the home when they were killed. When the dispatcher called the number back, a voice mail greeting indicated the phone belonged to Denise Closs.

AFC Asian Cup: 'Messi Jay' stunner puts Thailand back on track
UAE is probably the strongest side in this group with a FIFA World ranking of 79, ahead of India's rank of 97. Ashique Kurniyan is expected to keep his place in the team after an awesome performance against Thailand.

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.

Kate Beckinsale Checkmates Fan Shaming Her For Pete Davidson Dating Rumors
Anytime the British actress posts on Instagram , it's essentially a social media master class ― seriously, follow her immediately. Not Pete Davidson ", the judgemental fan commented under an old photo of Beckinsale's mother, actress Judy Loe.

Harrington to captain Europe at 2020 Ryder Cup
The Irishman's appointment, which had been widely expected, was confirmed at a European Tour news conference at Wentworth today. And I don't take it lightly. "It's an uphill struggle to beat the United States in the United States , for sure".

Jerry Jones Spends More to Buy Yacht Than He Did on Cowboys
The billionaire businessman is the new owner of a custom superyacht roughly the length of a football field, at 357 feet, which Mr. That price tag, of course, is $100 million more than what he paid to buy the Cowboys in 1989 .

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.

The Division 2 PC Requirements Revealed, Ubisoft Drops Steam for Epic Store
While the Epic Games Store has been around since December 2018, it looks like the service will get even bigger here in 2019 . But, as far as the decision between Epic Games Store and Steam is concerned, there's obvious reason to side with Epic.

Samsung phone users discover they can't delete Facebook app
Another user, Justin McMurry, tweeted in December about concerns over the potential privacy threat posed by the Facebook app. Unfortunately, you can't remove or uninstall majority like other downloaded apps from the Google PlayStore.

Cristiano Ronaldo Says He Doesn't Know His Accuser Jasmine Lennard
The 33-year-old Portuguese soccer player has vehemently denied the accusation. "It's wrong. Ms Mayorga reported the alleged sexual assault to police on the day it occurred.

'If Shutdown Continues, I Won't Go' - Trump May Skip Davos
He said he will not attending because Democrats will not budge on border security, thus continuing the government shutdown. China and the United States have taken a 90-day pause in implementing tariffs to hammer out a trade deal.

Benfica to meet with Mourinho in coming days
Despite his admiration for Benfica and Portuguese football , the manager sees his return to the game at a top European club. As reported earlier, 55-year-old Mourinho has been heading Manchester United since 2016.

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.

Longford people in flu risk group are urged to get vaccinated
The health department tracks reports of flu-like illnesses across the county in hospitals, assisted-living centers and schools. Public Health won't consider the flu season to be active until that threshold has been crossed for two straight weeks.