Fed Chair Powell highlights strong US economy and labor market

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Fed Chair Powell highlights strong US economy and labor market

Federal Reserve Chairman Jerome Powell provided an optimistic overview of the US economy during a discussion at the Foreign Bankers' Association's Annual General Meeting in Amsterdam.

Powell highlighted the robust performance of the US economy, noting a particularly strong labor market and the good financial health of households.

According to Powell, consumer spending and business investment have maintained their strength, despite ongoing labor shortages across various industries. He emphasized that, overall, the US economic data paints a positive picture.

The labor market is also showing signs of returning to a better balance and is currently as tight as it was pre-pandemic, with indications of gradual cooling as supply and demand begin to align more closely.

Inflation, however, was a point of concern for Powell in the first quarter, as it showed no significant signs of progress.

"Inflation in Q1 was notable for the lack of further progress," Powell said.

"We did not expect a smooth road on inflation, we have to be patient and let policy do its work."

"Confidence in inflation moving back down is lower than it was. My confidence on that is not as high as it was before."

Despite the challenges with inflation, the Fed Chair projected continued GDP growth of 2% or better and expects the labor market to remain strong while rebalancing.


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