Fed policy report flags strong economy, uncertain policy outlook

Fed notes stabilized and strong task market

Report flags raised monetary appraisal levels

(Adds talk about efficiency, Fed policy guidelines)

By Michael S. Derby

Feb 7 (Reuters) - The Federal Reserve's most current Monetary Policy Report to Congress, released on Friday, raovatonline.org was positive about the state of the economy however warned about some concerning elements of the monetary system.

The report, which comes ahead of next week's testament before Congress by Fed Chair Jerome Powell, said main bank officials remain committed to getting inflation back to 2% and kept in mind that when it pertains to interest rate policy changes officials "will thoroughly assess incoming information, the developing outlook, and the balance of dangers."

The release explained the overall economy as doing well in the middle of a strong and better-balanced task market and declining inflation pressures.

The Fed report said the monetary system is broadly speaking "sound and durable." But it also kept in mind "appraisals remained high relative to principles in a variety of markets, including those for equity, business debt, and property realty."

It also said "appraisal pressures increased rather from currently high levels" while flagging that "vulnerabilities related to financial take advantage of remained significant."

The report did not appear to recommend any broad hazard to the economy from the financial system and said that "credit continued to be broadly available" to mid-sized and big businesses, a lot of homes and city governments. Credit was "fairly tight" for funsilo.date small firms and those with credit problems.

When it pertains to total loaning levels, overall debt levels for families and non-financial companies "continued to trend down to a level that is very low relative to that in the previous 20 years."

The Monetary Policy Report, which comes two times annual, wiki.dulovic.tech was based upon information available to the main bank since Thursday. The report normally summarizes subjects currently well known to Fed watchers and .

The report comes as the Fed deals with a highly uncertain environment due to massive policy changes now pondered or underway from President Donald Trump.

The main bank had the ability to reduce its rates of interest target by a full percentage point in 2015 amidst alleviating inflation pressures. Future cuts, nevertheless, are extremely uncertain as Trump pursues trade and workforce policies that many economists believe will increase inflation at a time when rate pressures remain above target. Some in the Fed have pointed straight at the government as a source of uncertainty limiting the guidance authorities can provide about the financial policy outlook.

The Fed report had limited talk about the potential customers for Trump trade policies but did note "some market participants also indicated possible increases in U.S. tariffs on imports as an element pushing the dollar higher in recent months."

The release likewise said strong productivity may assist the economy grow faster in the future without developing inflation pressures. The Fed discovered that emerging expert system innovation hadn't done much yet to goose performance but said the impact "may grow as AI utilize becomes more prevalent."

While the report didn't have much guidance about the outlook for financial policy, it did acknowledge that the current 4.25-4.50% federal funds target rate range followed the level suggested by policy guidelines. Officials do not use rules to set policy however view them as elements worth thinking about as they figure out the best level for short-term rates of interest. (Reporting by Michael S. Derby; Editing by Andrea Ricci)