Fed policy report flags strong economy, uncertain policy outlook

Fed notes stabilized and strong task market

Report flags raised financial appraisal levels

(Adds comments on productivity, Fed policy guidelines)

By Michael S. Derby

Feb 7 (Reuters) - The Federal Reserve's newest Monetary Policy Report to Congress, released on Friday, opensourcebridge.science was positive about the state of the economy however alerted about some worrying elements of the financial system.

The report, which comes ahead of next week's statement before Congress by Fed Chair Jerome Powell, said main bank authorities remain committed to getting inflation back to 2% and kept in mind that when it pertains to interest rate policy modifications authorities "will carefully evaluate incoming data, the progressing outlook, and the balance of dangers."

The release explained the general economy as succeeding amid a strong and better-balanced task market and declining inflation pressures.

The Fed report said the financial system is broadly speaking "sound and resistant." But it also noted "appraisals remained high relative to principles in a variety of markets, consisting of those for equity, business financial obligation, and property realty."

It likewise said "appraisal pressures increased somewhat from currently high levels" while flagging that "vulnerabilities related to monetary take advantage of remained significant."

The report did not appear to recommend any broad hazard to the economy from the monetary system and addsub.wiki said that "credit continued to be broadly available" to mid-sized and large services, a lot of households and local federal governments. Credit was "fairly tight" for little firms and alldogssportspark.com those with credit problems.

When it pertains to overall borrowing levels, overall debt levels for families and non-financial companies "continued to trend down to a level that is extremely low relative to that in the past twenty years."

The Monetary Policy Report, which comes two times yearly, was based upon data available to the main bank since Thursday. The report normally summarizes topics currently well known to Fed watchers and market participants.

The report comes as the Fed faces a highly uncertain environment due to large-scale policy modifications now pondered or underway from President Donald Trump.

The main bank was able to lower its interest rate target by a complete percentage point in 2015 in the middle of reducing inflation pressures. Future cuts, nevertheless, are highly uncertain as Trump pursues trade and forum.altaycoins.com labor force policies that a lot of financial experts believe will drive up inflation at a time when price pressures remain above target. Some in the Fed have actually pointed straight at the federal government as a source of uncertainty limiting the guidance authorities can provide about the financial policy outlook.

The Fed report had actually restricted on the potential customers for townshipmarket.co.za Trump trade policies however did keep in mind "some market participants also pointed to possible increases in U.S. tariffs on imports as an aspect pressing the dollar higher in recent months."

The release likewise said strong efficiency might assist the economy grow faster in the future without developing inflation pressures. The Fed found that emerging artificial intelligence technology had not done much yet to goose productivity however said the influence "may grow as AI use becomes more extensive."

While the report didn't have much guidance about the outlook for financial policy, it did acknowledge that the existing 4.25-4.50% federal funds target rate range was consistent with the level suggested by policy rules. Officials don't use guidelines to set policy however see them as elements worth considering as they determine the ideal level for short-term rate of interest. (Reporting by Michael S. Derby; Editing by Andrea Ricci)