Fed Boss: no Recession, but Risks for the Economy. There will be no recession. That’s what Jerome Powell, president of the US Federal Reserve, expects.

Powell gave a strikingly positive picture of the American economy during a speech in Zurich.

He noted that both the US economy and that of the entire world would be affected by the geopolitical developments, but does not expect a recession.

The chief of the Federal Reserve said there are “significant risks” due to, among other things,

 the trade war, tensions in trade and slower economic growth worldwide.

He does not expect a decline for both the US economy and the world economy.

New interest rate reduction expected
He also said that the Fed is ready to intervene where necessary.

The comments had little impact on market expectations about the Fed’s interest rate policy.

An interest rate cut later this month is taken into account.

Analysts have been expecting interest rates to fall by a quarter percent again in September.

The Federal Reserve is taking this step to alleviate any immediate pain.

The lowering of interest rates by the central bank ensures that banks can borrow money cheaper.

It also ensures that banks can lend easier and cheaper to citizens and businesses, which stimulates the economy.

Policymakers meet on 17 and 18 September.

By the end of July, the Federal Reserve lowered interest rates for the first time in ten years.

On the other hand, interest rates have been rising since 2015,

 but in July interest rates were reduced by 25 basis points – a quarter percent.

The last time that happened was in 2008.

Then the interest rate was lowered to almost zero in several steps due to the financial crisis.

The interest rate increases were intended precisely to get the prices back to the level before the crisis.

The United States is doing pretty well right now.

The country is in the longest period of economic growth ever, and unemployment is low.