Federal Reserve Chairman Jerome Powell. | Manuel Balce Ceneta, File/AP Photo finance Powell: Fed ‘not forecasting or expecting a recession’

Federal Reserve Chairman Jerome Powell said the central bank is not expecting a recession for the U.S. or the global economy, although he acknowledged there are formidable risks ahead.

“We’re not forecasting or expecting a recession,” Powell said in a question and answer session in Switzerland at the University of Zurich.


His comment comes amid growing concern that the U.S. may be headed for a slowdown, and with President Donald Trump pressuring the Fed to aggressively slash interest rates.

The economic outlook took another turn into dangerous territory this week with a widely tracked gauge of the U.S. manufacturing sector contracting for the first time in more than three years, walloping the stock market and reigniting fears of a recession. It added to mounting concerns about a global economic slowdown under the weight of Trump's trade wars. On Friday, the Labor Department reported only modest job gains for August.

But against the backdrop of still-strong consumer sentiment and rising wages, Powell sounded an upbeat tone, saying the economy has “continued to perform well.”

At the same time, he did nothing to dispel market expectations that the Fed will cut interest rates later this month, saying the central bank would “act as appropriate to sustain the expansion” and arguing that the economy has been supported by expectations of looser Fed policy.

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Fed policymakers cut rates in late July for the first time in a decade.

Trump has been pushing the central bank to move faster, tweeting today: "The Fed should lower rates. They were WAY too early to raise, and Way too late to cut,... Where did I find this guy Jerome?!”

Powell, who was appointed chairman by Trump, also strongly pushed back on the notion that the central bank should seek to influence the 2020 presidential election, a suggestion raised last month by Bill Dudley, former president of the powerful New York Fed branch.

“The answer would be a hard no,” he said. Powell said he and his Fed colleagues “would not tolerate” any effort to include political factors in their policy deliberations. “We serve all Americans regardless of their political party,” he said.