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WASHINGTON – Federal Reserve Chairman Jerome Powell has reaffirmed the central bank’s commitment to maintaining easy money policies until the economy further recovers from the effects of the coronavirus pandemic.
“The economy is falling short of our targets for jobs and inflation,” Powell said in testimony before the Senate Banking Committee, a statement he has repeated in recent weeks. The Fed will therefore continue to support the economy with near zero interest rates and large-scale asset purchases until “further substantial progress has been made,” a standard Mr Powell said. “That will probably take some time” to achieve.
Mr Powell handed committee members the biannual report on the Fed’s monetary policy to committee members on Tuesday and is expected to do the same on Wednesday at a hearing of the House financial services committee.
The hearings come as steady progress on vaccinations and multiple rounds of fiscal stimulus have improved the outlook for the economy, the Fed chief noted.
Daily coronavirus cases have fallen from their peak in early January, and recent economic data, including retail sales, industrial production, hiring and service sector activity, indicate that economic growth has picked up in the new year after slowing down at the end of 2020. Consumer confidence in the United States increased in February for the second month in a row as Americans grew increasingly optimistic about current business and market conditions labor, the Conference Board reported Tuesday. Yet, nearly a year after the onset of the crisis in the United States, the country has around 10 million fewer jobs than in February 2020.
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