The Fed’s final meeting is approaching in December making market participants alert to any comments from the officials. Investors are looking for the clues whether there will be another rate cut in 2019. That is why the recent statement of Federal Reserve Chairman Jerome Powell has received so much attention. In his speech, Powell noted that the US economy was steadily growing and the current level of the key rate was “suitable.” However, the official stressed that the US federal debt was on an “unsustainable path” and could possibly limit the Congress’ ability to support the economy in case of a recession. Jerome Powell also said that if economy continues to grow, there would be no need to make additional rate cuts. “In a downturn, it would also be important for fiscal policy to support the economy. However, as noted in the Congressional Budget Office’s recent long-term budget outlook, the federal budget is on an unsustainable path, with high and rising debt. Over time, this outlook could restrain fiscal policymakers’ willingness or ability to support economic activity during a downturn,” Powell said.
