With economic uncertainties mounting—including concerns over trade policy and slowing global growth—Federal Reserve Chairman Jerome Powell today cautioned that “monetary policy should not overreact to any individual data point or short-term swing in sentiment.”
Powell noted that that the members of the FOMC are currently “grappling with… whether these uncertainties will continue to weigh on the outlook and thus call for additional policy accommodation.” In the most recent FOMC statement, the committee signaled that it would closely monitor the implications of incoming information and take appropriate actions to continue the expansion.
Powell offered his view that the baseline economic outlook remains favorable, with continued low employment and inflation returning to 2 percent over time, though likely at a slower pace than that seen earlier this year. “However, the risks to this favorable baseline appear to have grown,” he added.
