Powell on the next downturn: generally the Fed has cut 500 bps in recessions
Powell on the next downturn: generally the Fed has cut 500 bps in recessions, but there isn't that room currently. It's a new normal, with lower interest rates, lower growth, and lower inflation. Low interest rates could be a function of low inflation, prices under control and less volatile for years, and demographics with the aging population's increased demand for savings. He reiterated the outlook on the economy is good and households are focused on the good job market. The key to keep the expansion going is maintaining job creation and household confidence. Powell also noted Congress can play a part in boosting labor force participation. There are a range of policies, including skills and training, internships, and addressing the opioid crisis.