Federal Reserve Chairman Jerome Powell said sturdy U.S. economic growth has built a strong case for continuing to gradually lift interest rates. According to a Wall Street Journal report, he warned against policy makers growing complacent now that the central bank has nearly achieved its goals for employment and stable prices.
“Today, with the economy strong and risks to the outlook balanced, the case for continued gradual increases in the federal-funds rate remains strong and broadly supported among” participants on the Fed’s rate-setting committee, Powell said.
The Fed’s rate-setting committee unanimously agreed last week to lift the central bank’s benchmark short-term rate for the second time this year, to a range between 1.75% and 2%, and officials penciled in two more rate increases this year.
Powell was set to speak at the European Central Bank’s annual policy conference in Sintra, Portugal. His prepared remarks highlighted the risks of allowing unemployment to fall too low below the level expected to prevail over the long run. Currently, Fed officials estimate that natural level of employment would put the jobless rate at around 4.5%, above the 3.8% unemployment rate recorded in May.
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