New Federal Reserve Chairman Jerome Powell has pledged to “strike a balance” between the risk of an overheating economy and the need to keep growth on track. Stating that the central bank would stick with gradual interest rate increases despite the added stimulus of tax cuts and government spending.
Fed policymakers anticipate three rate increases this year, and Powell gave no indication in prepared remarks to the House Financial Services Committee that the pace needs to quicken even as the “tailwinds” of government stimulus and a stronger world economy propel the U.S. recovery.
The testimony sent Powell’s first signal as Fed chief that the massive tax overhaul and government spending plan launched by the Trump administration will not prompt any immediate shift to a faster pace of rate increases. “Gradual” has been the operative word since the Fed began raising rates under Janet Yellen, in late 2015. The Fed is expected to approve its first rate increase of 2018 at the next policy meeting in March, when it will also provide fresh economic projections and Powell will hold his first press conference.
Former prime minister Silvio Berlusconi said on Tuesday he planned to propose Antonio Tajani, the president of the European Parliament, as prime minister if his centre-right bloc wins Italy’s March 4 election.
Tajani, has been one of Berlusconi’s his most loyal lieutenants, staying by his side when the veteran leader, was forced to resign as prime minister in 2011 at the height of a sovereign debt crisis. By choosing Tajani, Berlusconi would send a calming message to EU allies and financial markets that any centre-right government would not be hostile to the European Union.
Antonio Tajani's pro-European credentials means he will not be welcomed with open arms by either the League or Brothers of Italy, which are both eurosceptical. The League in particular wants Italy to quit the euro currency as soon as is politically feasible.
Tajani has also looked to reassure moderates within Italy who might be alarmed by the far-right nature of Forza Italia’s closest allies, appearing in public twice this month with Pope Francis’s right-hand man, Cardinal Pietro Parolin.
10.00 – EUR: CPI Estimate YoY; Forecast at 1.2% against previous of 1.3%
13.30 – USD: Preliminary GDP QoQ; Forecast at 2.5% against a previous of 2.6%