The US economy will grow at a solid though slower pace in Y 2019 and the Fed will remain “patient” in deciding whether to further raise interest rates, Fed Chairman Jerome Powell said Tuesday.
Chairman Powell reaffirmed the policy shift made by the Fed last month, telling a Senate Banking Committee hearing that “crosscurrents and conflicting signals” had weakened the case for further rate increases and made an otherwise positive economic outlook less certain.
“We view current economic conditions as healthy and the economic outlook as favorable,” Chairman Powell told lawmakers, projecting that the economy would expand at a solid pace in Y 2019, albeit somewhat slower than in Y 2018, and the job market would remain strong.
The Fed now estimates that GDP grew by slightly less than 3% in Y 2018. The US government is scheduled Thursday to release its Q-4 GDP report, which was delayed by the recent partial US government shutdown.
“Some data have softened but still point to spending gains this Quarter,” Chairman Powell said, highlighting the sometimes contradictory set of information the Fed grappled with at year’s end.