Fed’s Powell: Longer US government shutdown will hit economy » Manila Bulletin Business

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Fed’s Powell: Longer US government shutdown will hit economy

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By Agence France-Presse

The US economy could take a clear hit from the government shutdown if it continues for a long time, Federal Reserve Chairman Jerome Powell said Thursday.

New Federal Reserve boss Jerome Powell will speak before a key finance committee this week, with traders looking for clues about his monetary policy plans. (AFP / MANILA BULLETIN)

New Federal Reserve boss Jerome Powell (AFP / MANILA BULLETIN)

While most previous shutdowns have been fairly short and have not affected the economy in the aggregate, Powell said, “if we have an extended shutdown, I think that would show up in the data pretty clearly.”

The US government has been partially shuttered since late December as President Donald Trump has refused to sign a budget agreement unless Congress agrees to allocate $5 billion for a border wall.

About 800,000 federal workers, including air traffic controllers and members of the Coast Guard, have been without pay for three weeks.

“In the short term if government shutdowns don’t last very long they’ve typically not left much of a mark on the economy,” Powell said.

He also worried about the lack of key economic statistics during the government shutdown that the Fed uses to take the temperature of the economy.

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