ST. LOUIS (Reuters) - Federal Reserve Governor Jerome Powell said on Thursday the U.S. economy is in “solid shape” but that the Fed can be patient in approving any interest rate increase because of the weak global environment.
“We can continue to be patient,” Powell said. “We are in a global environment in which growth is weak and there are deflationary forces.”
Powell did not say if he expected rates to rise this year, either at the Fed’s November or December meetings. But a core of 14 of the Fed’s 17 members released forecasts last week saying they felt at least one rate increase would be appropriate by year end.
Powell said he agreed that if the economy continues on its current course, the Fed should raise rates gradually.
If current trends to continue, “the correct path going forward will be a path of gradual rate increases. That will all depend on the economy continuing to perform well,” he said at a community banking conference.
Reporting by Howard Schneider; Editing by Meredith Mazzilli