“The Fed will continue to support the US economy”

by time news

Time.news – The Federal Reserve will support the economy and will not change its accommodative policy until the recovery is complete. The US economy is at a tipping point but the greatest risk remains a resurgence of the Covid-19 virus, so reopening should not be rushed. To say the number one of the Faith, Jerome Powell, in ’60 Minutes’, an interview with CBS.

“There are really risks out there. And the main one is that if we reopen too quickly, people will go back to old habits too quickly and we will see another picor cases, “he explained. The impact of vaccinations should mean that any spike in cases won’t be as severe and won’t have the same disastrous effects on public health and the economy as previous spikes. But Powell pointed out that the recovery economic will go “even faster as we keep the spread of the virus in check”.

“We’re like we’re at a tipping point where the economy is about to start growing much faster and job creation is coming much faster,” Powell said. “And this is thanks to widespread vaccinations and strong fiscal and monetary policy support. And so the main risk for our economy at the moment is really that the contagion could spread again.” “It would be really important – added the head of the Fed – if people continued to keep their distance and keep their masks”.

From you the Fed intends to “maintain support for the economy until the recovery is largely complete”. The Federal Reserve will therefore not change its current policy of near-zero interest rates and bond purchases of $ 120 billion a month now. “We will consider an interest rate hike when the labor market recovery is complete and when we return to maximum employment and the 2% inflation target. It will take some time for this to happen,” he explained.
Powell finally made a distinction between the Fed’s intention to run inflation “moderately” above its 2% target and anything faster than that. “We don’t want inflation to materially rise above 2% and go back … to the bad, old days of inflation” of the 1970s, he said.

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