Text from chair Powell's testimony on Capitol Hill
- Policy likely appropriate flooring material reassessment
- Risks to outlook remain, closely monitoring coronavirus
- Fundamentals supporting household spending still strong
- Virus could cause disruption in China with spillovers
- Repeats Fed to slow bill buying, transition from repos
- Putting budget on sustainable path creates policy space
- Important for fiscal policy to help in a downturn
- Sees inflation moving closer to 2% over the next few months
- Current stance of monetary policy will likely remain appropriate as long as incoming information about economy remains consistent with Fed's outlook
- Economic activity increased at a moderate pace and 2nd half of 2019 as economy appeared resilient to global headwinds
- Fundamentals supporting household spending remains solid
- Business investment and exports have been weak largely reflecting sluggish growth abroad and trade developments
- Fed is closely monitoring the coronavirus which could lead to disruptions in China that spill over to the global economy
- Fed expects inflation to move closer to percent of the next few months as unusually low readings from early 2019 drop from the 12 month calculation
- US faces long-run challenges, site labor force participation lower than in other advanced economies and labor market disparities across racial ethnic and geographic groups
- Finding ways to boost labor force to space in a productivity should remain a national priority
- More sustainable federal budget path would give policymakers space to use fiscal policy in downturn in support the economy's growth over the long term
US stocks have tilted a little to the downside. The NASDAQ index is up 38 points (versus 43 points). The S&P index is up 10.3 points versus 11.3 points prior to the release.
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