Federal Reserve Chairman Jerome Powell said the central bank is not expecting a recession for the U.S. or the global economy, although he acknowledged there are formidable risks ahead.
“We’re not forecasting or expecting a recession,” Powell said in a question and answer session in Switzerland at the University of Zurich.
His comment comes amid growing concern that the U.S. may be headed for a slowdown, and with President Donald Trump pressuring the Fed to aggressively slash interest rates.
The economic outlook took another turn into dangerous territory this week with a widely tracked gauge of the U.S. manufacturing sector contracting for the first time in more than three years, walloping the stock market and reigniting fears of a recession. It added to mounting concerns about a global economic slowdown under the weight of Trump’s trade wars. On Friday, the Labor Department reported only modest job gains for August.
But against the backdrop of still-strong consumer sentiment and rising wages, Powell sounded an upbeat tone, saying the economy has “continued to perform well.”
At the same time, he did nothing to dispel market expectations that the Fed will cut interest rates later this month, saying the central bank would “act as appropriate to sustain the expansion” and arguing that the economy has been supported by expectations of looser Fed policy.
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Jerome Powell: The Fed is not expecting a recession for the U.S. or the global economy https://t.co/W3SPEg4mPH pic.twitter.com/vXClgOuFnH
— POLITICO (@politico) September 6, 2019
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