In the testimony to Joint Economic Committee, Fed Chair Jerome Powell said the baseline outlook is “favorable”. And current monetary policy stance will remain appropriate as long as the outlook is unchanged.
On the economy, Powell said “my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2 percent objective as most likely”. But “noteworthy risks to this outlook remain”, including sluggish growth abroad and trade developments. Inflation pressures “remain muted” and long-term inflation expectations are at the “lower end of their historical ranges”.
Nevertheless, he added “we see the current stance of monetary policy as likely to remain appropriate as long as incoming information about the economy remains broadly consistent with our outlook”. “if developments emerge that cause a material reassessment of our outlook, we would respond accordingly”. But he emphasized “policy is not on a preset course”.
