Speaking in Switzerland
- there is significant risk to economic outlook
- outlook is for moderate growth, strong labor market
- US economic outlook remains favorable
- US economy is in a good place
- US manufacturing, trade sideways to slightly down
- 2019 growth likely from 2% to 2.5%, driven by consumers
- latest nonfarm payroll consistent with good outlook
- trade policy is weighing on business investment
- FOMC will continue to act as appropriate
- Fed will act appropriately to sustain expansion
The early comments are not suggested an aggressive Fed action (i.e. 50 BPS)
More Powell:
- most likely case for US/ world is moderate growth
- today's jobs report consistent with solid labor market
- the Fed has heard quite a bit from companies on uncertainty
- trade uncertainty means some firms delaying investment
- Fed is not forecasting or expecting a recession
- our obligation is to use tools to support the economy
- we are conducting policy in a way to address risks
- payroll jobs are well above new labor market entrants
- Fed is conducting policies that will address the risks that the economy faces
- There is a new macro economic backdrop which is low inflation, low growth, low rates
- neutral interest rate down 2 to 3 percentage points in the last 20 years
- central banks will have less ability to counter a downturn by cutting rates in the future
- Fed very committed to defending 2% target
- Fed should not let inflation fall too far below target
- Fed does not have groupthink mentality
- asked if politics color decisions Powell responded "absolutely not"
- electoral politics are absolutely not part of mandate, political factors played no role in decisions
Comments from SNBs Jordan at the same Q&A session
- sees that global economy slowing down
- global economy impacting us a lot
- basis scenario isn't for Swiss recession
- global economic uncertainty having negative impact
- we depend on a functioning global economy
The S&P index was at 2980.50 at the start of the session.
