The U.S. economic outlook is “remarkably positive,” Federal Reserve Chairman Jerome Powell said at a business economics conference today. “Since 1950, the U.S. economy has experienced periods of low, stable inflation and periods of very low unemployment, but never both for such an extended time as is seen in these forecasts.”
In his speech, Powell addressed several risks that the Fed is considering as it conducts monetary policy, including inflation expectations becoming unanchored, inflation pressures moving up faster than expected and the natural unemployment being lower than expected.
“This historically rare pairing of steady, low inflation and very low unemployment is testament to the fact that we remain in extraordinary times,” Powell said. “Our ongoing policy of gradual interest rate normalization reflects our efforts to balance the inevitable risks that come with extraordinary times, so as to extend the current expansion, while maintaining maximum employment and low and stable inflation.”