Wait and See

By Isaac Cohen*

The last meeting of the Federal Reserve Open Market Committee last week in Washington, decided to leave interest rates unchanged and adopted “a wait and see” approach regarding future policy changes. The explanation offered by Federal Reserve Chairman Jerome Powell, in his opening statement at the end of meeting press conference, is that “we are now facing a somewhat contradictory picture of generally strong U.S. macroeconomic performance alongside growing evidence of crosscurrents.”
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20200129.pdf

For the US economy, the central bank foresees “sustained expansion of economic activity; strong labor market conditions and inflation…near 2 percent.” In these conditions, Chairman Powell said, “We continue to expect that the American economy will grow at a solid pace in 2019, although likely slower than the very strong pace of 2018.”

However, there are “crosscurrents and conflicting signals.” Among them, Chairman Powell mentioned the slowdown in some advanced economies and in China; the uncertainty generated by the United Kingdom departure from the European Union and by trade tensions; tightened financial conditions; and lower business and consumer confidence.

These “crosscurrents,” Chairman Powell concluded, “suggest the risk of a less favorable outlook.” Therefore, “in this environment, we believe we can best support the economy by being patient in evaluating the outlook before making any future adjustment to policy.”

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.

About Ramón Jiménez

Ramón Jiménez, Managing Editor de MetroLatinoUSA.Com (MLN). Graduado de la Escuela de Periodismo de la Universidad del Distrito de Columbia (UDC). Email: ramonjimenez169@gmail.com

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