* Fed Chair Jerome Powell said the central bank no longer forecasts a recession this year.
* It’s a shift from previous meetings when the committee left the potential for a recession on the table.
* The Fed raised interest rates by 25 basis points on Wednesday after a June pause.
Federal Reserve Chair Jerome Powell confirmed the central bank no longer believes a recession will happen this year.
On Wednesday, the Fed announced it was raising interest rates by 25 basis points after it held rates steady in June. It’s the bank’s latest move to get inflation down to its 2% target, and while the latest inflation data shows prices are cooling, Powell said during the press conference that additional hikes will be warranted to continue battling inflation.
“We’ve come a long way,” Powell said. “We are resolutely committed to returning inflation to our 2% goal over time. Inflation repeatedly has proved stronger than we and other forecasters have expected and at some point that may change. We have to be ready to follow the data. And given how far we’ve come, we can afford to be a little patient as well as resolute as we let this unfold.”
However, he punted recession concerns by saying that the Fed staff no longer forecasts a recession in 2023. This differs from previous Federal Open Market Committee meetings, during which the staff did leave a recession on the table.
R&I ~ MJM
Conservative-Minion
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