Powell to address Congress as economic picture seems brighter

When Federal Reserve Chairman Jerome Powell appears before Congress this week, he’ll be bringing some reassuring economic news. After three interest rate cuts by the Federal Open Market Committee — the most recent in late October — indicators of recession risk appear to be receding.

Since mid-summer, the yield curve has un-inverted, the housing sector has strengthened, business and consumer confidence have rebounded somewhat, economic growth and job creation are steady and unemployment remains very low.

However, downside risks remain for the U.S. economy over the next 12 to 18 months, including continued global economic weakness, uncertainty about the Brexit process, and the potential for escalating U.S.-China trade tensions and tariff hikes. The Trump administration has threatened to impose additional tariffs on a number of Chinese imports to the U.S. on December 15. The Fed’s final interest rate-setting meeting of 2019 is scheduled for earlier that week.