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According to Jerome Powell, the Chairman of the US Federal Reserve, the US economy is strong, and despite a lower GDP in the first quarter and higher interest rates imposed by the Fed, there is no indication that the country is headed for a recession.

"It's a strong economy; nothing about it suggests that it's close to or vulnerable to a recession," Powell told reporters after chairing the Fed’s monthly policy meeting. The central bank approved today its first 50-basis point rate hike in more than 20 years and said there will be at least two increases of this kind in upcoming meetings.

"I think we have a good chance to restore price stability without a recession," Powell added. 

The US' GDP declined by 1.4% in the first three months of the year, and if there is negative growth in the second quarter then the US will be automatically in a recession. 

With inflation at 8.5% now, the Fed said it will keep up monetary tightening through 2023 if necessary to keep inflation at its annual target of 2%.

Further surprises possible

Powell also noted that if the Federal Reserve does not act appropriately and controls price pressures, then inflation in the US may have more surprises.

"Making appropriate monetary policy in this uncertain environment requires a recognition that the economy often evolves in unexpected ways, inflation has obviously surprised the upside over the past year, and further surprises could be in store," Powell explained, adding that the central bank will need to be "nimble" in responding to incoming data.