Powell plays down recession concerns amid solid economic growth

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Federal Reserve Chairman Jerome Powell today expressed optimism about the US economy during a Federal Open Market Committee (FOMC) press conference, downplaying the likelihood of a recession.

“I don’t see anything in the economy right now that suggests the likelihood of a recession is increased,” he said, citing solid growth, lower inflation and a strong labor market.

The Federal Reserve adjusted its monetary policy, lowering the target range for the federal funds rate to 4.75%–5%, reflecting progress in controlling inflation.

“Inflation is now much closer to our target and we have gained more confidence that inflation is moving sustainably towards 2%,” Powell noted.

Although the labor market remains relatively strong, Powell stressed the need for vigilance.

“Retail sales show the economy is growing at a solid pace, which should support labor markets,” he said, adding that wages and participation rates were healthy, but the labor market was “under close watch.”

While the Fed remains cautious about easing policy too quickly, Powell said, “We now see that the risks to our employment and inflation goals are roughly balanced.” Despite external risks, he remains confident in the economy’s resilience.

Future policy

Powell stressed that the recent 50 basis point rate cut should not be seen as the norm, with the Fed taking a flexible approach on a meeting-by-meeting basis. “We are not on a set course,” he said, emphasizing adaptability in future decisions.

He also noted broad support among FOMC members for more rate cuts this year, with 19 participants expecting multiple cuts, signaling strong consensus for further easing to balance inflation and growth.

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