August 26, 2019

Powell: Fed 'working to sustain' favorable economy

moneyFederal Reserve Chair Jerome Powell, during a speech at the Federal Open Market Committee's annual retreat in Jackson Hole, Wyo., Friday, described the U.S. economy as being "in a favorable place" and said the Fed is "working to sustain these conditions in the face of significant risks."

Powell noted strong economic growth, a falling unemployment rate and rising labor force participation as positive aspects of the current situation, but also highlighted concerns about global economic growth due to trade and tariff uncertainty.

"Chairman Powell struck a fairly neutral tone with this speech," said NAFCU Chief Economist and Vice President of Research Curt Long. "This reinforces the challenges of finding a strategy which acknowledges both heightened economic risks and solid recent performance, while at the same time finding some common ground between the divergent views of FOMC members."

Read Powell's full remarks.

Minutes from the FOMC's July meeting released last week revealed that committee members were divided on the decision to cut rates 25 basis points. After analyzing the minutes, Long predicted that the Fed's monetary-policy setting arm would again cut rates during its upcoming September meeting.

Long and NAFCU member credit unions are set to discuss economic issues at the Federal Reserve Bank of Chicago later this week. The association also has a meeting with Federal Reserve Governor Michelle Bowman this fall; member credit unions are encouraged to provide responses to NAFCU's annual Fed survey, which will inform that meeting.