WASHINGTON – Jerome Powell, Chairman of the Federal Reserve, reaffirmed the central bank’s commitment to maintain affordable policies until the economy has further recovered from the effects of the coronavirus pandemic.
“The economy is a long way from our employment and inflation targets,” Mr. Powell said in testimony before the Senate Banking Committee, a statement he has echoed in recent weeks. The Fed will therefore continue to support the economy with interest rates near zero and large-scale asset purchases until “substantial further progress is made,” a standard Mr Powell said “will likely take some time.”
Mr Powell handed over the Fed’s semi-annual monetary policy report to committee members on Tuesday and will do so at a House Financial Services Committee hearing on Wednesday.
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.
The number of daily coronavirus cases has fallen from early January peak, and recent economic data, including retail, industrial production, hiring and service sector activity, has indicated that economic growth has picked up in the new year after a slowdown late 2020. Consumer confidence in the US rose for a second consecutive month in February as Americans became more optimistic about current business and labor market conditions, the Conference Board reported Tuesday. Yet almost a year after the crisis broke out in the US, the country has about 10 million fewer jobs than in February 2020.