Federal Reserve Chairman Jerome Powell sees the U.S. economy generating highly optimistic expectations, with the unusual combination of low unemployment and inflation fueling hopes for an extended expansion.
In a speech Tuesday, the central bank chief said the jobless rate is running at 3.9 percent and inflation is around the Fed’s goal of 2 percent. Historically, low unemployment has fueled inflation and sometimes has forced the Fed into hiking interest rates rapidly.
“While these two top-line statistics do not always present an accurate picture of overall economic conditions, a wide range of data on jobs and prices supports a positive view,” Powell told economists at a Boston conference. “In addition, many forecasters are predicting that these favorable conditions are likely to continue.”
He pointed out that after last week’s Federal Open Market Committee meeting, a reporter asked him if the current conditions are “too good to be true,” which he called “a reasonable question.”