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Fed chair: Gradual rate increases 'best way forward'
Federal Reserve Chair Jerome Powell says "with appropriate monetary policy, the job market will remain strong and inflation will stay near 2 percent over the next several years." Powell's remarks came as he testified before the Senate Banking Committee Tuesday.
"Chairman Powell's positive account of the state of the economy shows he is not overly concerned that issues like tariffs or a flattening yield curve are poised to derail the expansion," said NAFCU Chief Economist and Vice President of Research Curt Long after Powell's testimony. "The odds are strengthening that the [Federal Open Market Committee (FOMC)] will proceed with two additional rate hikes this year."
Powell is on Capitol Hill this week presenting the Fed's semiannual monetary policy report; he is set to testify before the House Financial Services Committee today.
Powell told the Senate Banking Committee the FOMC sees gradual raises to the federal funds rate as the best path forward considering the current environment "with a strong job market, inflation close to our objective, and the risks to the outlook roughly balanced."
"Overall, we see the risk of the economy unexpectedly weakening as roughly balanced with the possibility of the economy growing faster than we currently anticipate," Powell testified.
Also Tuesday, the Senate voted to confirm Randal Quarles to a 14-year term on the Federal Reserve Board of Governors. Quarles was already serving on the board under a term that expired in January; he was approved to serve a five-year term as vice chairman of supervision in October.