Policymakers indigence to be on guard for imbalances in the financial system, but there appears little threat of that being the case now, Federal Reserve Chairman Jerome Powell put Tuesday.
Still, the central bank chief indicated that the Fed delineates on hiking rates three times this year and may be inclined to a fourth, peculiarly since a series of fiscal measures including tax cuts and increases in lavishing has come to pass since December.
Powell said individual Fed colleagues will be making new projections at the March meeting, which would be impacted by the fiscal aggressiveness.
“I wouldn’t want to prejudge that new set of projections, but we’ll be delightful into account everything that’s happened since December,” he divulged the House Financial Services Committee.
Repeating his previous warnings, Powell suggested the central bank has to be careful as stock market prices continue to rise.
“This is a mores when we need to be alert to buildup of either financial imbalances or to inflation structure up,” the Fed chief said. “We don’t really see those right now.”
As Powell spoke, caches turned from positive to negative as he reiterated the need for the Fed to continue on its track of consistent, gradual rate hikes.
“If you look at the financial stability site broadly, we do see some high asset prices,” he said. “What we don’t see is the buildup of leverage aggregate households. We see the banking system and the financial system generally being quite resilient. I think the financial stability picture shows at most moderate risks.”
Addressing the economic situation, Powell earlier in his prepared declares said economic growth is “solid.” Asked about the flattening of the relinquish curve, he said he was largely unconcerned about compression between control bond yields.
“It’s very typical for the yield curve to flatten as short-term rates descend upon up as the economy strengthens,” he said. “There’s always the risk of a recession at any confirmed point in time. I don’t see it as at all high at the moment.”