Federal Reserve Chairman Jerome Powell voiced optimism about the state of the U.S. economy, but warned of long-term threats to the record-long expansion currently underway.
Those challenges include low growth, low inflation and low interest rates.
"While not everyone fully shares economic opportunities and the economy faces some risks, overall it is—as I like to say—in a good place," Powell said. "Our job is to keep it there as long as possible."
Powell's comments followed a deluge of bad economic data this week.
In September, the Institute for Supply Management's purchasing managers' index fell to 47.8 percent, the lowest level since 2009. Any figure below 50 percent signals a contraction. That reading triggered the start of a stock market plunge, with the Dow Jones Industrial Average shedding more than 800 points over the course of two days. It continued on Thursday, after the services survey showed the economy is weaker than expected.
And on Friday, new data revealed that job growth missed expectations in August, with 136,000 added versus the 145,000 expected. However, the unemployment rate fell to a 50-year low.
Although Powell did not address whether policymakers at the U.S. central bank will cut interest rates at their upcoming meeting this month, he cautioned that ultra-low rates limit the Fed's ability to respond in the case of recession.
"Low can be good, but when inflation—and, consequently, interest rates—are too low, the Fed and other central banks have less room to cut rates to support the economy during downturns," Powell said on Friday during his opening remarks at the Fed Listens event in Washington, D.C.
The Fed lowered borrowing costs in July for the first time since the financial crisis, and did so again in mid-September. RIght now, short-term interest rates are between a range of 1.75 percent to 2 percent. About 76 percent of traders think there will be a third cut at policymaker's Oct. 30 meeting.