2019, a year of strong growth for US
Fed
would keep keen watch
to
ensure muted inflation!
Despite
Goldman, Forbes, economic analysts feared a slower US economy in 2019, Vice
Chairman and member of the Board of Governors, US Federal Reserve, Richard H.
Clarida said, “In terms of the economic outlook, ongoing momentum heading into
this year indicates that that above-trend growth is likely to continue in 2019.”
He was speaking on Monetary Policy Outlook for 2019 at the Money Marketeers of
New York University.
As
we begin 2019, the initial conditions for the real economy are favorable.
Through the first three quarters of last year, gross domestic product growth
averaged 3.2 percent. Private-sector forecasts as well as our Summary of
Economic Projections indicate that, when the data for the fourth quarter are
released, they will show the economy likely grew at 3 percent or perhaps a
little faster in 2018 for the year as a whole.
If
so, economic growth in 2018 would be the fastest annual growth rate recorded in
13 years. In terms of the
economic outlook, ongoing momentum heading into this year indicates that that
above-trend growth is likely to continue in 2019. If the economy
continues to grow in 2019 along the lines that I expect, in July the current
expansion will become the longest in recorded U.S. history.
With
labor supply and productivity growth in 2018 having surprised on the upside,
some mean reversion in 2019 is not unreasonable to forecast. But right now,
that is just a forecast, and if the positive developments on the supply side of
the economy continue in 2019, they would need to be factored into the inflation
outlook and thus the appropriate settings for monetary policy.
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