Fed policy report flags solid economy, uncertain policy outlook

Fed notes supported and oke.zone strong task market

Report flags raised monetary appraisal levels

(Adds remarks on performance, Fed policy rules)

By Michael S. Derby

Feb 7 (Reuters) - The Federal Reserve's latest Monetary Policy Report to Congress, released on Friday, was positive about the state of the economy however alerted about some concerning elements of the financial system.

The report, pipewiki.org which comes ahead of next week's testimony before Congress by Fed Chair Jerome Powell, said main bank authorities remain committed to getting inflation back to 2% and noted that when it pertains to rates of interest policy changes authorities "will carefully examine incoming information, the progressing outlook, and the balance of dangers."

The release explained the overall economy as doing well amid a solid and better-balanced task market and decreasing inflation pressures.

The Fed report said the monetary system is broadly speaking "sound and resistant." But it also noted "appraisals remained high relative to principles in a variety of markets, consisting of those for equity, business debt, and domestic genuine estate."

It likewise said "appraisal pressures increased somewhat from currently high levels" while flagging that "vulnerabilities connected with monetary leverage remained notable."

The report did not appear to suggest any broad threat to the economy from the financial system and said that "credit continued to be broadly available" to mid-sized and wiki.dulovic.tech large businesses, funsilo.date the majority of homes and city governments. Credit was "fairly tight" for small firms and photorum.eclat-mauve.fr those with credit issues.

When it pertains to general loaning levels, overall debt levels for homes and non-financial firms "continued to trend down to a level that is really low relative to that in the past 2 decades."

The Monetary Policy Report, which comes two times annual, was based upon data available to the main bank since Thursday. The report usually sums up subjects currently popular to Fed watchers and market participants.

The report comes as the Fed faces a highly uncertain environment due to massive policy modifications now pondered or underway from President Donald Trump.

The main bank was able to reduce its rates of interest target by a full percentage point last year amid easing inflation pressures. Future cuts, nevertheless, are highly uncertain as Trump pursues trade and workforce policies that many financial experts think will drive up inflation at a time when rate pressures remain above target. Some in the Fed have actually pointed straight at the government as a source of uncertainty limiting the guidance officials can provide about the financial policy outlook.

The Fed report had limited remarks on the prospects for Trump trade policies however did keep in mind "some market participants also indicated potential boosts in U.S. tariffs on imports as a factor pressing the dollar higher in recent months."

The release likewise said strong efficiency might help the economy grow faster in the future without producing inflation pressures. The Fed found that emerging expert system innovation had not done much yet to goose productivity however said the impact "might grow as AI utilize ends up being more prevalent."

While the report didn't have much guidance about the outlook for pipewiki.org financial policy, it did acknowledge that the current 4.25-4.50% federal funds target rate range followed the level suggested by policy rules. Officials do not use guidelines to set policy however view them as elements worth thinking about as they identify the best level for surgiteams.com short-term rate of interest. (Reporting by Michael S. Derby; Editing by Andrea Ricci)