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Charles Plosser, the head of the Philadelphia Federal Reserve, believes GDP will be near 2.5 percent in 2019.
“If you go back to the forecast for 2019 last fall, 2018 was coming in close to 3 percent – almost everyone was forecasting something between 2 [percent] and 2.5 percent for 2019. Is that a good number? Probably still is,” he told Maria Bartiromo on Thursday, adding “trend -- potential growth, is less than 2 [percent] or just under 2 [percent]. So there’s still the forecast that we are going to be at or near trend for 2019. And so I find the notion that … there’s this panic that we need to react to troubling.”
Plosser also believes the Fed “overreacted” to Wall Street’s tumultuous December and another round of volatility wouldn't be good.
“They sent a signal that they were going to be dovish and cut rates and they doubled down on that over the course of the spring and now they are in a position where, I think, to some degree the Fed’s probably afraid that if they don’t now deliver on the rate cuts they are going … to cause another bout of volatility and they don’t want to do that. That’s the curse of paying too much attention to financial markets when you do monetary policy,” he said.