Powell credits strong US economy to Fed policies

During an hour-long question-and-answer session in Dallas, Federal Reserve Chair Jerome Powell sounded an optimistic note on the U.S. economy, crediting its strong performance to policies set by the central bank.

“Our policy is part of the reason the economy is in such a good place now,” he said on Wednesday at the Federal Reserve Bank of Dallas.

That comment may have been a quiet rebuke to President Trump, who’s openly criticized Powell for raising interest rates, which he said hinders economic growth. Trump nominated Powell as chair last November, but has become increasingly critical of the Fed, calling it “crazy” and describing it as the “biggest threat” to his presidency. He also told FOX Business that he was “not thrilled” with Powell’s decisions.

“We have a very important job that Congress has assigned us: Serve the public,” he said. “That’s our sole focus. We don’t try to control things we don’t control. We try to control the controllable. We’re just trying to do our jobs, and we’re doing fine.”

In order to extend recovery and keep inflation rates low, Powell said Fed policymakers are monitoring financial conditions, including determining how the markets, economy and business contacts react to their policies.

But he also cautioned that every time the Federal Open Market Committee meets from now on, there’s the possibility of additional -- but gradual -- short-term interest rate hikes. Last week, the Fed left rates unchanged at the conclusion of the two-day meeting, but noted that the central bank remained on track to gradually raise interest rates. The next rate hike is expected in December and would mark the fourth and final one of 2018.

“Certainly all meetings are live now, there’s no question about it now,” Powell said.

Higher rates can impact consumers by increasing borrowing costs, which have already skyrocketed. Auto loan rates are at a nine-year high and 30-year fixed mortgage rates recently climbed to their highest level in seven years. Mortgage rates are also spiking.