Fed chair says US economy deals with 'unusual set of disruptions'

The Federal Reserve Chair Jerome Powell said Friday the American economy deals with "unusual set of disruptions" after the central bank made a rate hike of 75 basis points of rate hike for the third consecutive time on Wednesday.

"We continue to deal with an exceptionally unusual economic set of disruptions. As policymakers, we are committed to using our tools to help steer the economy through what has been a uniquely challenging period," he said during a Fed Listens event held in Washington, D.C.

Powell referred to the current record high inflation and low economic growth environment as "the new normal" and said "The insights you share in these events help us home in on the challenges and opportunities that are shaping what we might think of as the new normal of the American economy."

The Fed has prioritized lowering inflation over economic growth, but there still remains the risk of a recession in the US economy.

The central bank now expects the American economy to grow 0.2% this year, down from its previous forecast of 1.7% growth made in June. The growth estimate for 2023 was also lowered to 1.2%, down from the earlier expectation of 1.7%, according to its latest projections.

Consumer inflation in the US showed an annual increase of 8.3% in August, above the 8.1% market estimate, after it peaked at 9.1% in June on an annual basis.