1. Wide of Federal Reserve Chair Jerome Powell arriving for hearing
2. SOUNDBITE (English) Jerome Powell, Chair, Federal Reserve
"The economy grew at a strong pace on balance last year, and employment and inflation remained close to the Federal Reserve's statutory goals of maximum employment and stable prices, our dual mandate. Based on available data we estimate the Gross Domestic Product or GDP rose a little less than 3 percent last year, following a two and a half percent increase in 2017. Last year's growth was led by strong gains in consumer spending and increases in business investment. Growth was supported by increases in employment and wages, optimism among households and businesses, and fiscal policy actions. In the last couple of months some data have softened but still point to spending gains this quarter. While the partial government shutdown created significant hardship for government employees and many others, the negative effects on the economy are expected to be fairly modest, and to largely unwind over the next several months."
3. SOUNDBITE (English) Jerome Powell, Chair, Federal Reserve
"The job market remains strong. Monthly job gains averaged 220,000 in 2018, and payrolls increased an additional 304,000 in January. The unemployment rate stood at 4 percent in January, a very low level by historical standards, and job openings remain abundant. Moreover, the ample availability of job opportunities appears to have encouraged some people to join the workforce, and some who otherwise might have left to remain in it. As a result, the labor force participation rate for people in their prime working years, which is to say the share of people ages 25 to 54, who are either working or actively looking for work, has continued to increase over the past year. In another welcome development, we are seeing signs of stronger wage growth."
4. SOUNDBITE (English) Jerome Powell, Chair, Federal Reserve
"Overall Consumer Price Inflation, as measured by the 12 month change in the price index for personal consumption expenditures, is estimated to have been one point seven percent in December; held down by recent declines in energy prices. Core PCE (personal consumption expenditures) inflation, which excludes food and energy prices and tends to be a better indicator of future inflation, is estimated at 1.9 percent. At our January meeting, my colleagues and I generally expected the economic activity to expand at a solid pace, albeit somewhat slower than in 2018, and the job market to remain strong."
5. SOUNDBITE (English) Jerome Powell, Chair, Federal Reserve
"While we view current economic conditions as healthy, and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals. Financial markets have become more volatile toward year end, and financial conditions are now less supportive of growth than they were earlier last year. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around some unresolved government policy issues, including Brexit and ongoing trade negotiations. We will carefully monitor these issues as they evolve."
Federal Reserve Chairman Jerome Powell says the U.S. economy should keep expanding at a solid, though somewhat slower pace this year.
But he warns of growing risks, including a global slowdown, volatile financial markets and uncertainty about U.S. trade policy.
In delivering the Fed's semiannual monetary report to Congress, Powell says the Fed will be "patient" in determining when to boost its benchmark policy rate in light of the various "crosscurrents and conflicting signals."
He says the Fed's rate decisions will be "data dependent" as the economic outlook evolves.
The Fed in December indicated it could hike rates two times this year. But many private economists believe the Fed will keep rates unchanged until late this year and may not hike at all.
Powell said that the economy grew at a strong pace last year, with employment and inflation remaining close to the Fed's goals.
He said it appeared that overall growth was slightly below 3 percent in 2018. The Fed expects 2019 growth to slow somewhat.
Powell cited a number of factors that could slow growth have emerged in recent months.
He noted that growth has slowed in major foreign economies, including China and Europe, and "uncertainty is elevated" around major policy issues such as Brexit, Britain's proposed exit from the European Union, and ongoing U.S. trade negotiations with various countries.