stats
globeinteractive.com: Making the Business of Life Easier

   Finance globeinvestor   Careers globecareers.workopolis Subscribe to The Globe
The Globe and Mail /globeandmail.com
Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space


Search

space
  This site         Tips

  
space
  The Web Google
space
   space



space

  Where to Find It


Breaking News
  Home Page

  Report on Business

  Sports

  Technology

space
Subscribe to The Globe

Shop at our Globe Store


Print Edition
  Front Page

  Report on Business

  National

  International

  Sports

  Arts & Entertainment

  Editorials

  Columnists

   Headline Index

 Other Sections
  Appointments

  Births & Deaths

  Books

  Classifieds

  Comment

  Education

  Environment

  Facts & Arguments

  Focus

  Health

  Obituaries

  Real Estate

  Review

  Science

  Style

  Technology

  Travel

  Wheels

 Leisure
  Cartoon

  Crosswords

  Food & Dining

  Golf

  Horoscopes

  Movies

  Online Personals

  TV Listings/News

 Specials & Series
  All Reports...

space

Services
   Where to Find It
 A quick guide to what's available on the site

 Newspaper
  Advertise

  Corrections

  Customer Service

  Help & Contact Us

  Reprints

  Subscriptions

 Web Site
  Advertise

  E-Mail Newsletters

  Free Headlines

  Globe Store New

  Help & Contact Us

  Make Us Home

  Mobile New

  Press Room

  Privacy Policy

  Terms & Conditions


GiveLife.ca

    

PRINT EDITION
Fed highlights 'solid' U.S. economic growth
space
space
By LINDSAY DUNSMUIR, HOWARD SCHNEIDER
REUTERS
  
  

Email this article Print this article
Saturday, July 14, 2018 – Page B2

WASHINGTON -- The U.S. Federal Reserve on Friday pointed to "solid" U.S. economic growth during the first half of the year in its semi-annual report to Congress, where it also reiterated that it expected to continue to raise interest rates gradually.

It is the Fed's second submission to lawmakers since chair Jerome Powell took the helm in early February. He is scheduled to answer questions on it before lawmakers on Tuesday and Wednesday.

Details of the 63-page report were consistent with the Fed's current outlook detailed at its policy meetings, which is that strong economic growth and low unemployment require rate rises, but that a lack of severe inflation pressures means they can remain gradual.

Financial markets were little moved following the release of the report.

"Over the first half of this year, overall economic activity appears to have expanded at a solid pace," the Fed said, adding that the economy continues to be supported by favourable consumer and business sentiment, past increases in household wealth, solid economic growth abroad and accommodative domestic financial conditions.

As such, the Fed "expects that further gradual increases" in interest rates would be appropriate as it strives to continue to nurture an economic expansion that is now the second-longest on record.

The Fed said the Trump administration's package of tax cuts had likely contributed to a rebound in consumer spending from a sluggish start to the year and will likely provide a moderate boost to economic growth this year.

The relatively rosy picture of the U.S. economy was also referenced by Mr. Powell in an interview on Thursday, in which he said he believes the U.S. economy remains in a "really good place" with recent government tax and spending programs set to boost gross domestic product for perhaps three years.

The Fed has raised interest rates seven times since it began a tightening cycle back in December, 2015, and last lifted its benchmark lending rate by a quarter percentage point in mid June.

The Fed sees another two rate hikes by year end.

The central bank barely weighed in on the potential impact of the Trump administration's protectionist trade policies, but noted that the uncertainty around them was a concern to financial markets. A number of policy makers have fretted that escalating trade disputes with Europe, Canada, Mexico and China could slow business investment and Mr. Powell said on Thursday that sustained high tariffs on products and services could hurt the economy.

"We don't see anything too surprising," Jim O'Sullivan, chief U.S. economist at High Frequency Economics in White Plains, N.Y., said of the report. "In short, Fed officials anticipate continued gradual tightening, assuming no major fallout from trade tensions."

Elsewhere in the report, policy makers once again flagged that wage growth has been weaker than they would have expected given the current unemployment rate of 4 per cent.

Wage gains have been "moderate," the report said, likely held down by weak productivity, and it highlighted the possibility that there could still be some further slack in the labour market, with more prime-age workers poised to enter the work force "if labour demand remains strong."

The Fed showed little concern about financial stability, saying Treasury markets were broadly stable and there was minimal evidence of liquidity pressures. However, it noted valuations were elevated for some assets and that an economic slowdown could amplify vulnerabilities for lowerrated corporates.


Huh? How did I get here?
Return to Main Hugh_Winsor Page
Subscribe to
The Globe and Mail
 

Email this article Print this article

space  Advertisement
space

Need CPR for your RSP? Check your portfolio’s pulse and lower yours by improving the overall health of your investments. Click here.

Advertisement

7-Day Site Search
    

Breaking News



Today's Weather


Inside

Rick Salutin
Merrily marching
off to war
Roy MacGregor
Duct tape might hold
when panic strikes


Editorial
Where Manley is going with his first budget




space

Columnists



For a columnist's most recent stories, click on their name below.

 National


Roy MacGregor arrow
This Country
space
Jeffrey Simpson arrow
The Nation
space
Margaret Wente arrow
Counterpoint
space
Hugh Winsor  arrow
The Power Game
space
 Business


Rob Carrick arrow
Personal Finance
space
Drew Fagan arrow
The Big Picture
space
Mathew Ingram arrow
space
Brent Jang arrow
Business West
space
Brian Milner arrow
Taking Stock
space
Eric Reguly arrow
To The Point
space
Andrew Willis arrow
Streetwise
space
 Sports


Stephen Brunt arrow
The Game
space
Eric Duhatschek arrow
space
Allan Maki arrow
space
William Houston arrow
Truth & Rumours
space
Lorne Rubenstein arrow
Golf
space
 The Arts


John Doyle arrow
Television
space
John MacLachlan Gray arrow
Gray's Anatomy
space
David Macfarlane arrow
Cheap Seats
space
Johanna Schneller arrow
Moviegoer
space
 Comment


Murray Campbell arrow
Ontario Politics
space
Lysiane Gagnon arrow
Inside Quebec
space
Marcus Gee arrow
The World
space
William Johnson arrow
Pit Bill
space
Paul Knox arrow
Worldbeat
space
Heather Mallick arrow
As If
space
Leah McLaren arrow
Generation Why
space
Rex Murphy arrow
Japes of Wrath
space
Rick Salutin arrow
On The Other Hand
space
Paul Sullivan arrow
The West
space
William Thorsell arrow
space





Home | Business | National | Int'l | Sports | Columnists | The Arts | Tech | Travel | TV | Wheels
space

© 2003 Bell Globemedia Interactive Inc. All Rights Reserved.
Help & Contact Us | Back to the top of this page