Fed’s chief predicts solid, slower growth

WASHINGTON — Federal Reserve Chairman Jerome Powell told Congress on Tuesday the U.S. economy should keep expanding at a solid, though somewhat slower pace this year. But he warned 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 said the Fed will be “patient” in determining when to boost its benchmark policy rate in light of the various “crosscurrents and conflicting signals.”

“When I say that we are going to be patient, what that really means is that we are in no rush to make a judgment about changes in policy,” Powell said in response to questions from lawmakers on the Senate Banking Committee. “We are going to be patient. We are going to allow the situation to evolve … and allow the data to come in. And I think we are in a good place to do that.”

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.

Andrew Hunter, senior U.S. economist at Capital Economics, said he believes a slowing economy will prompt the Fed to leave rates unchanged this year and to start cutting them next year.

“We think the Fed is already done hiking rates,” he said. “We expect a further slowdown over the course of this year to convince the Fed to begin cutting rates by early 2020.”

In his report to Congress, Powell repeated assurances the Fed has been making since January that it plans to be patient in deciding the next moves on interest rates.