Chairman of the US Federal Reserve Jerome Powell said today that there are signs of “several years” of a strong jobs market in the US, despite continuing uncertainty on the effect of President Trumps trade war with China.
Powell remarked that the “best way forward” is to keep gradually raising rates, allowing inflation to stay near the Feds 2 per cent target.
In a written testimony to the Senate Banking Committee today, he signalled that should appropriate decisions be made by the Reserve on monetary policy, the US economy can expect the current era of stable growth to continue.
Analysts believe his words to be the strongest sign yet that the Fed is within reach of its dual policy targets, more than a decade on from the beginning of a deep financial recession in the US.
They also expect the Fed will raise rates two more times this year, at 25 basis points each, in addition to the two rate increases already made in 2018.
The US dollar edged higher this afternoon off the back of Powell's comments, as well as positive data from US industrial production.