Fed Chair Powell: ‘My Gut Tells Me that Uncertainty About the Path of the Economy Is Extremely Elevated’

SCHNEIDER: “Hi, Howard Schneider with Reuters. Thanks for the time. I’m wondering, given the complexity about the first quarter GDP and what lies ahead, I’m just wondering what your intuition tells you about the underlying direction of the economy right now. Many of your colleagues have said they feel growth is slowing. If so, do you have any sense of by how much, to what degree the slowdown may be? What does your gut tell you about how things are evolving out there?”

Powell: “My gut tells me that uncertainty about the path of the economy is extremely elevated and that the downside risks have increased. The risk is, as we pointed out in our statement, the risks of higher unemployment and higher inflation have risen, but they haven’t materialized yet. They really haven’t. They’re really not in the data yet. So, and that tells me more than by intuition because I think it’s obvious, actually, that the right thing for us to do is we are in a good place, our policy’s in a very good place, and the right thing to do is await further clarity. And there’s usually things clarify and the appropriate direction becomes clear. That’s what usually happens. Right now it’s very hard to say what that would be. In the meantime, the economy is doing fine. Our policy isn’t — you know, it’s not highly restrictive. It’s somewhat restrictive. It’s 100 basis points less restrictive than it was last summer so we think it’s in a good place and we think the appropriate thing is for us to wait and see and get more clarity about the direction of the economy.”