(DCWatchdog.com) – Even as the American people are struggling with skyrocketing inflation, rising gas prices, and lingering shortages of essential goods, Jerome Powell, the Chairman of the Federal Reserve, claims the US economy is in a “pretty strong shape.”
You can watch a video of Powell’s remarks further down this post.
Powell told a central banker forum last week that the economy expanded by more than 5.5% over the past year since its reopening after the more intensive phases of the COVID-19 pandemic.
At the same time, he admitted that the Fed’s expectations of the nation’s economic development have failed to materialize fully.
“We had expected this year that growth would moderate to a more sustainable path. We also, of course, are raising interest rates, and the aim of that is to slow growth down so that supply will have a chance to catch up. We hope that growth can still remain positive,” Powell said, according to the Associated Press.
He argued further that his proposed raising of the interest rates is supposed to reduce growth slightly but just the right amount to bring down the inflation while stopping short of bringing about a recession or shooting up the unemployment rate.
At the same time, the Fed chief acknowledged that there was no way to ensure a recession would be avoided – and he stressed that Russia’s war to try and conquer Ukraine had been a major complicating factor for the global and US economy.
Despite the growing financial difficulties that more and more American families are encountering, Powell insisted that households remain “in very strong financial shape.” He ascribed that to them having “excess savings” or “forced savings from not being able to travel” during the coronavirus pandemic.
“Households are overall, not every household, and not the ones at the lower end of the income spectrum, but overall, in strong shape. The same is true of businesses, very low rates of defaults and things like that, lots of cash on the balance sheet,” the Fed chairman said.
“The labor market is tremendously strong, still averaging very, very high job growth per month. Overall, the US economy is well-positioned to withstand tighter monetary policy,” he elaborated.
He admitted that it is unknown whether the economy would ever return to the pre-pandemic levels because there are already factors at play that are “very different” from before.
A recent public opinion poll found that 85% of Americans believe the economy to have become worse or to be getting worse on Joe Biden’s watch.
Here is the video of Powell:
FED CHAIR POWELL: "The U.S. economy is actually in pretty strong shape. […] Households are in very strong financial shape. They've still got a lot of excess savings." pic.twitter.com/FEBguLvUPc
— Breaking911 (@Breaking911) June 29, 2022