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Powell Says U.S. Economy "Very Strong," Can Handle Higher Rates

Economy Jun 22, 2022 09:54AM ET
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© Reuters.

By Geoffrey Smith 

Investing.com -- The U.S. economy is still strong and can handle the planned series of interest rate rises, Federal Reserve Chair Jerome Powell said on Wednesday.

"The American economy is very strong and well positioned to handle tighter monetary policy," Powell said in his opening remarks to the Senate Banking Committee at the start of two days of testimony before Congress on the state of the economy.

Powell also noted that "real gross domestic product growth has picked up this quarter, with consumption spending remaining strong," although he acknowledged that "business investment appears to be slowing" and also said that the housing market is cooling as higher mortgage rates make themselves felt.  

At the same time, Powell stressed the Fed's determination to bring inflation down to its 2% target from the current 40-year high of 8.6%.

"We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so," Powell said. He argued that financial conditions have already tightened significantly since the Fed started withdrawing the stimulus it put in place at the start of the pandemic two years ago.

He added, however, that he couldn't rule out further upside surprises, pointing to the ongoing tightness of energy and other commodity markets due to Russia's invasion of Ukraine 

"Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways," he said. "Inflation has obviously surprised to the upside over the past year, and further surprises could be in store."

Powell said the Fed will need to be "nimble" in responding to any change in the economic outlook. 

Powell Says U.S. Economy "Very Strong," Can Handle Higher Rates
 

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Comments (51)
Tom Scheuermann
Tom Scheuermann 13 hours ago
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"very strong economy" with one negative GDP number and probably printing a second one for Q2. people need to realize, much like a president in a state of the Union address saying the state of the Union is strong no matter what, Powell will always tell you the economy is strong
Bu Ba
Bu Ba 14 hours ago
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of course uUS is the best and strongest and ...Till it colaps! like it did in every ressesion!
charles brooks
charles brooks 20 hours ago
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USA is strongest economy in the world by far.. anybody who thinks it will collapse is almost insane
dim dim
dim dim Jun 23, 2022 4:58PM ET
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US Economy is today a bud funny....time for total collapse
Dimitris Ziridis
Dimitris Ziridis Jun 23, 2022 8:52AM ET
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What you guys think it will be said today?
CS Greer
CSGreer Jun 23, 2022 7:06AM ET
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Wonder who they will blame when unemployment is real high after they're done wrecking the markets.
Jay Garrelts
Jay Garrelts Jun 23, 2022 7:06AM ET
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That would be you my good sir they all work for you right their just doing what you want them to do
Jay Garrelts
Jay Garrelts Jun 22, 2022 11:34PM ET
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That’s right strong like Steal
Jeremy Thornton
Jeremy Thornton Jun 22, 2022 10:04PM ET
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So much for transitory huh? He new what he was doing... transferring wealth to the rich and screwing the middle class and poor.
Ahuja Ramesh
Ahuja Ramesh Jun 22, 2022 10:04PM ET
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knew
CS Greer
CSGreer Jun 22, 2022 10:04PM ET
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Gershom Zvi
Gershom Zvi Jun 22, 2022 7:38PM ET
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Dont try it to break completely
Gershom Zvi
Gershom Zvi Jun 22, 2022 7:36PM ET
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Dont try it to break completely
 
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