Private sector forecasters see greater recession risk: Fed's Jerome Powell

Amid the ongoing issue surrounding the reciprocal tariffs imposed by the Trump administration on several countries, Federal Reserve Chairman Jerome Powell said in a press conference on Friday that the US central bank does not have a prediction of a downturn in its outlook, but he recognised that private-sector forecasters are shifting on that front.

 

  "We do not make a probability forecast of how likely it is for there to be a recession, but many outside forecasters do, and many of them have raised the likelihood, albeit from very low levels," Powell said.

 

"Uncertainty is high," Powell said. He added: "What we have learned is that the tariffs are higher than anticipated, higher than almost all forecasters predicted, and that it is unclear right now how this all will play out." 

 

Powell further said that he is not going to leave the chairmanship of the central bank before his term comes to an end. "I fully intend to serve all of my term," he said. Powell's current term will culminate in 2026.

 

Meanwhile, Powell also said that the "uncertainty" over the economy and government policy is hampering businesses.

 

"People are just... they just are kind of waiting for clarity and cannot tell you when that will pass, but you know, ultimately it will pass," Powell said.

 

He added that being cautious is the right thing to do as of now.

 

However, Powell said that he does not see a conflict between the central bank's mandates on jobs and inflation right now. He added that if trouble did arise, it would be tough for monetary policy.  (With inputs from Reuters)