Federal Reserve boss sees potential threats from global slowdown
WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell has said the U.S. economy is performing well but he's eyeing potential risks ahead.
Those include a slowdown in global growth, the fading impact from tax cuts and the cumulative weight of the Fed's own interest rate hikes.
According to Powell, the Fed is managing interest rates in an effort to prolong the current economic recovery.
The increased political attacks on the Fed will not divert the central bank from doing its job, he said.
President Donald Trump has called the Fed's rate hikes his "biggest threat."
The Fed has the tools and the protections it needs to serve the public in a "non-partisan, professional way," Powell said.
None of Powell's comments indicated the central bank would stray from expectations that at its December meeting it will hike rates for a fourth time this year.
The Fed left rates unchanged at its meeting last week.
Powell said the Fed is raising rates slowly in an attempt to avoid the mistake of hiking them either so quickly that it pushes the economy into a recession, or moving too slowly and allowing inflation to get out of control.
This gradual approach has translated into a total of eight quarter-point rate hikes since the Fed began raising rates in late 2015.
Those came after seven years in which the Fed kept its key policy rate unchanged near zero in an effort to lift the country out of the deepest recession since the 1930s.
Those hikes have pushed the Fed's key policy rate to a range of 2 to 2.25 percent.
The Fed has signalled that it expects to raise rates one more time this year and three more times in 2019.
During the recent turbulence in stock markets, Trump grew increasingly pointed in his criticism of the Fed's moves, saying they risked undoing his efforts to boost the economy with tax cuts and were not needed because inflation remains low.
Powell said political criticism would not affect the Fed's policies.