Zurich / Washington (AP) - The US Federal Reserve is optimistic about the further economic development in the US and does not expect a recession.
The Federal Reserve (Fed) anticipates moderate growth, good labor market data and a slight increase in inflation, said Federal Reserve Chairman Jerome Powell in Zurich. "We do not forecast and expect any recession," Powell said.
Commenting on the trade dispute between China and the US, Powell said the resulting uncertainty slows long-term investment. The central bank monitors the effects of the conflict and makes its decisions independently of the policy.
The Fed had cut interest rates by 0.25 percentage points to 2-2.25 at the end of July to forestall a possible slowdown in the US economy, which has been growing for ten years. The Fed's next interest rate decision is due on 18 September.
The unemployment rate in the US is at a low 3.7 percent and the economy is booming. However, growth has slowed down - also under pressure from the trade conflicts instigated by President Donald Trump. The confrontation with China, the second largest economy, also weighs on the stock markets. Warning signs of the bond market recently pointed to an imminent weakening of the economy, possibly also to a recession.