Powell Speaks on Fed’s Dovish Monetary Policy and its Impact on US Employment
US Federal Reserve Chairman Jerome Powell spoke in support of the central bank’s present monetary policy and how it benefits workers and supports the strong labor market in the United States. Powell made these comments while speaking at an event for the Greater Providence Chamber of Commerce.
According to Powell, revised employment data reveals that the labor market was not as strong as originally suggested in 2018, which further supports the Fed’s decision to turn dovish recently. Updated estimates from the Bureau of Labor Statistics reveal that job creation in the 12 months till March 2019 were around 500,000 less than the previously reported figures.
While Powell confirmed that the Fed’s decision to cut rates thrice in 2019 was driven mainly by weak inflation data, it is also likely to have a positive impact on the unemployment rate in the US. According to him, “The benefits of the long expansion are only now reaching many communities, and there is plenty of room to build on the impressive gains achieved so far.”
For now, the Fed seems quite upbeat about strong consumer spending driven by higher employment, wage growth and consumer confidence will help support economic growth in the US in the near future. However, he did express caution that external risks over global trade tensions and weakness in global economic growth would still be eyed in case it has any adverse impact on US GDP.
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