Fed’s Clarida says U.S. economy in ‘good place,’ sees more of same for 2020

Fed’s Clarida says U.S. economy in ‘good place,’ sees more of same for 2020

© Reuters. Federal Reserve Vice Chair Richard Clarida reacts as he holds his phone during the three-day “Challenges for Monetary Policy” conference in Jackson Hole

(Reuters) – The U.S. economy is in a “good place” and more of the same is expected in 2020, U.S Federal Reserve Vice Chair Richard Clarida said on Friday, reiterating the central bank’s stance that it has hit pause on interest rate changes.

“The U.S. consumer has never been in better shape,” Clarida said in an interview with Fox Business Network. “Going into next year I think we have a have a favorable outlook for the economy… We think we are in a good place.”

On Wednesday, the U.S. central bank kept interest rates unchanged and signaled borrowing costs will not change anytime soon, with moderate economic growth and historically low unemployment expected to persist through next year.

The Fed cut rates three times this year in a mini-easing cycle designed to sustain the U.S. economic expansion amid slowing global growth and a drop in business investment caused by the 17-month long U.S.-China trade war.

The Fed’s outlook for 2020 was bolstered earlier on Friday by an easing in U.S-China tensions with the world’s two largest economies announcing a “Phase one” agreement that reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods.

“Any resolution of that uncertainty, assuming it’s a good deal, is obviously a positive for the economic outlook,” Clarida said. He added though, that it was just a number of risks the Fed will monitor.

“This is obviously a negotiation; it looks like it’s going in a positive direction,” Clarida said. “But… global developments more broadly have been something we’ve been monitoring. You’ve had a global slowdown this year, emerging markets have been slowing down, there are muted inflation pressures. So it’s not just any one thing that we are focusing on.”

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Source : Reuters Link

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