Fed chair is ‘very worried’ about ballooning debt United States will inevitably face

The Bureau of Economic Analysis (BEA), an office under the U.S. Department of Commerce, has already stopped updating data for weeks due to the shutdown.

"Chairman Powell chose to make no news at his latest interview".

While most previous shutdowns have been fairly short and have not affected the economy in the aggregate, Powell said, "if we have an extended shutdown, I think that would show up in the data pretty clearly".

The balance sheet "will be substantially smaller than it is now", though bigger than it was before the crisis, Powell said.

Clarida is the latest United States central banker to refine the Fed's monetary message after the hawkish tone of their Dec 19 statement and forecasts for further rate hikes in 2019 roiled financial markets.

Since the meeting, Fed officials have indicated they're less inclined to keep raising than their statement and projections for hikes in 2019 had suggested.

The comments were closely aligned with the tone set earlier Thursday by Fed Chairman Jerome Powell, who used the word "patient" or "patiently" five times to describe the Fed's approach to rate increases.

Speaking to an audience in Washington, D.C, Powell delivered the same reassuring message that bolstered markets last Friday.

"Growth prospects in other economies around the world have moderated somewhat in recent months, and overall financial conditions have tightened materially, " he said in the text of a speech late on Thursday in NY. Bloomberg's financial conditions index has retraced much of its December tightening.

"I'm very anxious about it", the Fed chief told participants of The Economic Club of Washington, DC on Thursday. If global growth slows more, "I can assure you.we can flexibly and quickly move policy, and we can do so significantly if that's appropriate", he added.

December figures for the Fed's preferred gauge of inflation - a separate measure related to consumption - are scheduled for release on January 31, though the report could be delayed because of the partial government shutdown.

In remarks at an appearance in Little Rock, Arkansas, on Thursday, St. Louis Fed President James Bullard was blunt, saying that the central bank had reached the "end of the road" in its current rate increase cycle.

The us Central Bank, the Federal Reserve has pressed the pause button. Those forecasts appear supported by a robust December labor-market report, which showed the economy added 312,000 non-farm jobs, the most in 10 months. Financial markets are incorporating a variety of risks to the outlook, ranging from slowing global growth to the potential for a protracted trade war with China.

  • Eleanor Harrison