At this stage, Powell believes that “we cannot talk about a recession while we still have growth”, even if its pace has slowed.
The US economy is still in a position to avoid recession, Fed chief Jerome Powell said today, after the US central bank raised interest rates by 50 basis points as part of its efforts to contain inflation.
At this stage, Powell believes that “we cannot talk about a recession while we still have growth”, even if its pace has slowed.
“I don’t think anyone can know if we’re going to have a recession or not” in the US, the Fed chief added.
Faced with rising prices to their highest level in 40 years, the Fed had made four consecutive rate hikes of 75 basis points. Today, it announced a rate hike of 50 basis points, confirming analysts’ forecasts for an easing of its aggressive policy.
However, it now appears less optimistic than it did in September about the path of US inflation, forecasting it to slow to 3.1% in 2023 when it recently forecast it would reach 2.8% next year.
Fed officials on hand revised their forecast for the growth rate of the US economy in 2023: 0.5% instead of 1.2% they estimated.
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