Federal Reserve Chairman Jerome Powell says his view on the economy is still optimistic, even as officials at the U.S. central bank sharply downgraded their projections for growth this year.

Powell said at a news conference Wednesday that "our outlook is a positive one."

The Fed chairman stressed that the unemployment rate is still low, incomes are rising and surveys of consumers and businesses suggest that confidence in the economy remains.

Fed officials are projecting a median growth of 2.1 percent in 2019, down from growth of 3.1 percent between the fourth quarter of 2017 and the same period in 2018.

In a wide-ranging news conference:

• Asked if the Federal Reserve might consider actually cutting rates later this year, Powell says that the current economic data does not indicate the need for the Fed to start cutting rates. “It is a great time for us to be patient and to watch and wait,” Powell says.
• Powell sidestepped a question about why the U.S. central bank is significantly less bullish about U.S. economic growth than the Trump White House. Fed officials are estimating growth of 2.1 percent, a full percentage point lower than the estimates from White House aides. That is a difference of roughly $200 billion in growth, with Trump officials suggesting that the tax cuts approved at the end of 2017 will continue to bolster faster economic gains. Despite multiple reports about Trump’s high expectations for growth, Powell says he was unfamiliar with the figures. “I haven’t seen their projection,” he said at a news conference. “I wouldn’t comment on their projection.”
• Powell says rising levels of federal debt are a problem, though not a problem that needs to be addressed immediately. The budget proposal released this month by President Donald Trump envisions four straight years of budget deficits topping $1 trillion, as the overall federal debt load would build. “This is something that we’ll have to deal with,” Powell said at a news conference. However, given the low interest rates on the debt, investors are still willing and eager to lend to the U.S. government. This suggests the problem isn’t pressing. “It’s not in the nature of a near-term debt crisis or anything like that,” Powell said, adding that the issue will have to be addressed eventually.
• Powell explained why he thinks a recent stumble in the U.S. economy’s growth will be temporary. Consumers appeared to pull back this winter, with retail sales plummeting in December and only bouncing back modestly in January. U.S. factory output has also slowed and home construction and sales fell last year. The Federal Reserve Bank of Atlanta the economy will barely grow in the first three months of this year, expanding just 0.4 percent at an annual rate. But Powell said that the conditions for a rebound in consumer spending are in place. Consumer confidence has recovered after falling during the 35-day government shutdown, while wages are rising steadily and hiring is healthy. “That looks like a setting where consumption has underlying support,” Powell said.