WASHINGTON – Federal Reserve Chairman Jerome Powell has reaffirmed the central bank’s commitment to maintain 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 time” to achieve.
Mr Powell delivered the Fed’s biannual monetary policy report to committee members on Tuesday and is expected to do the same on Wednesday at a House financial services committee hearing.
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 cases of the coronavirus 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 is s ‘is accelerating in the new year after slowing down at the end of 2020. Yet nearly a year after the crisis erupted in the United States, the country has about 10 million fewer salaried jobs than ‘in February 2020.