Jerome Powell

As concerns of a weak US economy get rampant after the Federal Reserve’s first interest rates for the first time in four years, chairman Jerome Powell has assured the public that: 
<blockquote>
 “The US economy is basically fine.”
</blockquote> 
At a time when concerns are piling up over the state of the economy, the man stands firm in his belief that things aren’t as bad as they seem. But how true is that? 
Inflation, for one, is edging closer to the Fed’s target of 2%. A major improvement from recent surges, even if it’s still above the ideal range. Meanwhile, economic activity is holding steady. 
Powell predicts a 2% growth rate for 2024, and it expects that figure to stay consistent through 2027. 
<blockquote>
 “Our monetary policy actions are guided by our dual mandate to promote maximum employment and stable prices for the American people. Our primary focus is on bringing down inflation, and appropriately so.”
</blockquote> 
One thing that can’t be ignored is the labor market, which remains weak despite a historically low unemployment rate. 
There’s no question that the labor market is a pillar of strength in the economy. But if fewer jobs are being created now, what happens if there’s an economic downturn? 
Job losses could mount, and suddenly, Powell’s assurance will start to feel hollow. 
One thing Powell doesn’t seem as eager to talk about is the mountain of debt the US is sitting on. Public debt reached around 93% of GDP in 2023. By the end of the decade, it could be knocking on the door of 100%. 
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 <figcaption id="caption-attachment-571741" class="wp-caption-text">
 Jerome Powell
 </figcaption>
</figure> 
If investors start losing confidence, borrowing costs could spike. This would mean higher interest rates overall, making it even harder for the economy to recover in the long run. 
Many advanced economies are seeing similar fiscal pressures. 
The markets, as usual, have their own take on Powell’s message. Some investors see the Fed’s recent half-point rate cut as a sign of deeper issues. If everything’s so fine, why the need <a href="https://www.federalreserve.gov/newsevents.htm" rel="nofollow noopener" target="_blank">for</a> 50 bps? 
This is a developing story

Jerome Powell says “the US economy is basically fine”

Cryptopolitan_News

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