© Reuters. POWELL’S (FED) OPTIMISTIC FOR GROWTH IN THE UNITED STATES
WASHINGTON (Reuters) – Jerome Powell, federal Reserve chairman, said Thursday, optimistic on the state of the u.s. economy, estimating that the tax cuts and spending programs announced by the administration, Trump will have an effect lasting beneficial on the growth.
“I think the economy is really good,” he said in an interview with the radio Marketplace.
“When you lower taxes and increase spending, in any case, you are stimulating the economic activity. You will observe a significant support (…) in economic activity for at least the next three years”.
Jerome Powell has not discussed monetary policy during the interview of 20 minutes, which was due to be broadcast in the day and the text of which has been communicated in advance.
When asked about the trade tensions, he said he did not know when these conflicts would be resolved, but added that the fiscal policy of the administration would support the economy for several years.
According to its latest forecast, the Fed anticipates an acceleration in growth to 2.8% this year and then a slowdown to 2.4% in 2019 and 2% in 2020, before decreasing to a rate of 1.8% which corresponds to the long-term potential of the u.s. economy.
In 2017, the world’s largest economy has recorded a growth of 2.3%.
Jerome Powell will be at the Convention next week for the hearing of the bi-annual state of the economy and monetary policy.
(Howard Schneider and Ann Saphir, Véronique Tison for the French service)