MADISON, Wis (Reuters) - The United States has likely skirted the recession risks of last year, with businesses adjusting to a new trade environment and the most acute worries about a trade war “abated somewhat,” St. Louis Federal Reserve bank President James Bullard said on Thursday.
After a dramatic shift to looser monetary policy last year, including three interest rate reductions, Bullard said there is a “reasonable chance” the Fed has engineered a soft landing for the economy after worries last year of a recession.
“Trade regime uncertainty will continue,” Bullard said, “but firms are adjusting business strategies to be profitable even in the face of uncertainty.”
Though the economy may grow more slowly this year, it is returning to its underlying trend - not facing a “sharper than anticipated” collapse, Bullard said.
“U.S. monetary policy is considerably more accommodative today than it was as of late 2018,” Bullard said at an economic forecast lunch with the Wisconsin Bankers Association, and that is acting as a buffer against the negative impacts on growth that might have been felt from the trade conflict and other global events.
Reporting by Howard Schneider; Editing by Andrea Ricci