Fed’s Powell Says Inflation And Employment Remain Low, Signals No Policy Changes Any Time Soon
Federal Reserve chair Jerome Powell told lawmakers Tuesday that the economic rebound has a long way to go and pledged that the Fed will continue to use its tools—which include keeping interest rates near-zero since March and a massive bond-buying program—to make sure that recovery is “as robust as possible.”
During his testimony before the Senate’s Banking Committee, Powell said employment and inflation are both below the Fed’s goals.
The Fed chair said earlier this month that the unemployment rate in January was close to 10%—significantly higher than the 6.3% rate reported by the Labor Department—due to workers who have dropped out of the labor force and aren’t being counted in the official tally.
Powell emphasized that inflation also remains well below the Fed’s 2% long-run target and said the prices remain “particularly soft” in the sectors hit hardest by the pandemic.
He also emphasized that the nature of the economic recovery depends “significantly” on the course of the ongoing coronavirus pandemic, and added that the “single best” policy to return the economy to normal would be to encourage people to get vaccinated.
“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” Powell said in his prepared remarks on Tuesday. “It is likely to take some time for substantial further progress to be achieved,” he added.
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