MNI POLICY: Fed Powell: Economy Faces Risks But In Good Place

By Jean Yung

     WASHINGTON (MNI) - Federal Reserve Chair Jay Powell said Friday the U.S.

economy "faces some risks" and inflation is close to but still missing the Fed's

2% objective. 

     "While not everyone fully shares economic opportunities and the economy

faces some risks, overall it is -- as I like to say -- in a good place. Our job

is to keep it there as long as possible," Powell said in opening remarks

prepared for a Fed Listens conference in Washington, part of a yearlong review

of its policy framework. 

     Unemployment is near a 50-year low, and inflation is "running close to, but

a bit below, our 2 percent objective," he added. 

     He made no specific mention of trade or the near-term outlook for monetary

policy. Instead Powell highlighted longer term challenges facing the U.S. and

other advanced economies, including low growth, inflation, and interest rates. 

     "Low can be good, but when inflation -- and, consequently, interest rates

-- are too low, the Fed and other central banks have less room to cut rates to

support the economy during downturns," he said. 

     The Fed expects to announce its conclusions from its policy framework

review in the first half of 2020, Powell said. Those may include revisions to

its inflation targeting and communications strategies, as well as an evaluation

of its crisis-fighting toolbox. 

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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