US not on 'cusp' of accelerating inflation: Fed Chair
US Federal Reserve Chairman Jerome Powell speaks during a news conference in Washington, DC. (Alex Wong/Getty Images/AFP)
WASHINGTON: New Federal Reserve Chairman Jerome Powell said on Wednesday (Mar 21) the central bank sees no signs that prices are set to rise sharply in the US economy.In his first press conference as Fed chief, Powell said "there is no sense in the data that we are on the cusp of an acceleration of inflation."There have been moderate increases in wages and price inflation, but the Fed is "very alert" to any increases that could result from the very low unemployment rate."It's not something we observe at the present," Powell said.Asked about the rising trade frictions sparked by President Donald Trump's aggressive actions, targeting China in particular, Powell said central bankers now view the prospect of a trade war as a growing threat to the economy."This is a new risk that had been probably a low profile risk which has become more prominent risk to the outlook," he said.
But officials did not get into specifics on whether the trade hit would impact inflation or growth, he said.He was speaking to reporters just after the Fed's policy-setting Federal Open Market Committee raised the benchmark lending rate for the first time this year, despite forecasts showing inflation is holding steady at about two percent through next year.The Fed's quarterly forecasts also show expectations for stronger economic growth this year and next, and the historically-low unemployment rate falling even further through 2019.Powell noted the likely growth boost from the massive tax cuts the US Congress passed in December, and said there are aspects of the package that could help raise the potential growth rate.
"It's important that we do something, do what we can as a country to increase our potential growth rate," he said.
Source : http://www.channelnewsasia.com/news/business/us-not-on-cusp-of-accelerating-inflation-fed-chair-10065258