MNI BRIEF: Fed's Powell - Trend Growth Could Be High As 2.25%
MNI (WASHINGTON) - The trend potential GDP growth rate in the United States could be rising to as high as 2.25%, Fed Chair Jerome Powell told lawmakers on Wednesday, pointing to increases in productivity over the last few years.
"For a long time, people thought that U.S. potential growth was a little bit below 2%. We've had five years of good productivity growth and we hope that'll continue. If that does continue then it might be 2% or 2.25%," he told lawmakers, who are in the middle of budget negotiations with some assuming much faster growth in their budget forecasts.
"If you're just talking about long term budget assumptions, though, I'd be conservative and say 2%," Powell said. The Fed in December's Summary of Economic Projections showed a median long-term GDP growth rate of 1.8%, with a range among FOMC officials from 1.7% to 2.5%.