Fed chair Jerome Powell, on Sunday in an interview with Scott Pelly talked about various issues relating to Fed’s policies, upcoming risks and their major concerns that can affect the whole economy. When asked about no new policy to rise interest rates, Powell explained that the economy is in a good place as inflation is stopped and their current policies are in the appropriate place. He said that the Fed will take no action now as it will watch the global economic conditions and its impact on the economy first. He talked about China and Europe and how they have been deploying many measures to support growth of their country and will likely to have a positive growth rate this year. He feels that the U.S economy has healthy conditions right now but they are looking at a broad range of financial conditions which includes interest rates, level of dollar, availability of credit and stock market. He said that the U.S economy will get affected by slower growth in China and Europe and risk events like Brexit. On a discussion about December retail sales that was lowest in last nine years he agreed on it and said that he will be watching next month retail sales as it would not be appropriate to watch just one month sales which will have shorter impact. According to him this year’s growth will be slower than last year but the economy is strong and there is no probability of financial crises.
When asked about President Donald Trump, Powell said that their decisions are strictly non-political and the president does not get involved in Fed’s policies. They take decisions based on what they think is right for American people. Their wide network of contacts throughout American business helped them to take appropriate decisions. Powell’s statement becomes controversial when he said that the Trump cannot fire him as he has a four year term contract.
When he was asked about the major risks, He said that the U.S debt is on an unsustainable path and it is growing faster than the economy and labour force participation is the biggest threat to American prosperity along with the cyber risks which can be fatal for the whole economy.