Federal Reserve Chairman Jay Powell said that an extended government shutdown could be damaging to the U.S. economy, according to a report in Financial Times.
The chairman shared his thoughts about the shutdown at a Washington luncheon on Thursday (Jan. 10) at the Economic Club of Washington, D.C. He was speaking with David Rubenstein, a co-founder of investment firm Carlyle Group, where Powell used to work.
Previous shutdowns were short and didn’t affect the economy too much, he said, but the current lockdown was entering into new territory as it continued its stalemate.
“A longer shutdown is something we haven’t had," he said. "If we had an extended shutdown, then I do think that would show up in the data pretty clearly.”
Powell explained that the shutdown would make it more difficult for the Fed to analyze the economy’s health because certain agencies tasked with monitoring the economy were also affected.
The U.S. economy is in good shape, he said, but financial markets are starting to express concerns about expansion. Something of particular concern is China’s slowing economy.
Powell stressed that the Fed is watching “patiently and carefully” while it keeps an eye on how things will turn out.
When asked about how U.S. president Donald Trump, with his criticisms of the Fed and its rising rates, Powell said the institution doesn’t take political machinations into consideration when setting policy. He did say that he was open to meeting with the president, however, even though he hasn’t been invited.
“I’m not aware of any Fed chair turning down an invitation from the White House, nor do I think that would be appropriate,” he said.
Last month, the Fed said that non-cash payment activity in the United States gained ground in 2017 year over year, and that card payments were up 10.1 percent.