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Chair Powell Questioned On The Resilience of the US Economy


Q: What is your story on the resilience of the economy? Does it mean we may need a higher terminal rate?

  • A: The labor market has been very strong, but the most interest-rate sensitive sectors are certainly showing the effects of our tightening. The obvious example is housing; we're having an effect on spending; through exchange rates we're having an effect on imports and exports. This is a strong, robust economy. Households have savings to support growth; states are flush with cash; reason to believe this will continue to be a reasonably strong economy.
  • Data are sort of showing growth will be below trend, 1.8%. We're forecasting growth before that but possible it can be stronger than that. It means the economy will be resistant to a significant downturn. But we are focused on getting inflation back down to 2%.

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