Fed policy report flags strong economy, uncertain policy outlook

Fed notes stabilized and strong job market

Report flags raised monetary appraisal levels

(Adds talk about productivity, Fed policy guidelines)

By Michael S. Derby

Feb 7 (Reuters) - The Federal Reserve's newest Monetary Policy Report to Congress, released on Friday, wavedream.wiki was positive about the state of the economy however cautioned 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 dedicated to getting inflation back to 2% and noted that when it pertains to interest rate policy changes officials "will carefully examine incoming information, the evolving outlook, and the balance of threats."

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

The Fed report said the monetary system is broadly speaking "sound and resistant." But it also kept in mind "appraisals remained high relative to basics in a series of markets, consisting of those for equity, corporate financial obligation, and property genuine estate."

It also said "appraisal pressures increased somewhat from currently high levels" while flagging that "vulnerabilities related to financial utilize remained noteworthy."

The report did not appear to recommend any broad threat to the economy from the monetary system and said that "credit continued to be broadly available" to mid-sized and photorum.eclat-mauve.fr large services, allmy.bio the majority of families and regional federal governments. Credit was "fairly tight" for little companies and those with credit problems.

When it pertains to total loaning levels, overall debt levels for homes 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 yearly, was based on information available to the main bank since Thursday. The report typically summarizes topics currently well known to Fed watchers and market participants.

The report comes as the Fed faces an extremely uncertain environment due to large-scale policy changes now considered or underway from President Donald Trump.

The main bank was able to decrease its rates of interest target by a complete portion point last year amid relieving inflation pressures. Future cuts, users.atw.hu nevertheless, demo.qkseo.in are extremely uncertain as Trump pursues trade and systemcheck-wiki.de labor force policies that many economic experts think 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 assistance authorities can offer about the financial policy outlook.

The Fed report had actually restricted comments on the prospects for townshipmarket.co.za Trump trade policies however did keep in mind "some market individuals likewise pointed to prospective boosts in U.S. tariffs on imports as an aspect pushing the dollar higher in current months."

The release also said strong productivity might assist the economy grow quicker in the future without creating inflation pressures. The Fed found that emerging expert system innovation hadn't done much yet to goose performance however said the influence "may grow as AI use becomes more extensive."

While the report didn't have much about the outlook for financial policy, it did acknowledge that the existing 4.25-4.50% federal funds target rate variety was consistent with the level recommended by policy rules. Officials do not use rules to set policy but see them as aspects worth thinking about as they determine the best level for short-term rate of interest. (Reporting by Michael S. Derby; Editing by Andrea Ricci)