WASHINGTON – Federal Reserve Chairman Jerome Powell reaffirmed the central bank’s commitment to maintaining easy money policies until the economy recovers further from the effects of the coronavirus pandemic.
“The economy is a long way from our employment and inflation targets,” Powell said in a statement to the Senate Banking Committee, a statement he repeated in recent weeks. The Fed, therefore, will continue to support the economy with near-zero interest rates and large-scale asset purchases until “substantial progress has been made”, a pattern that Powell said will “probably take some time” to achieve.
Powell delivered the Fed’s six-monthly monetary policy report to committee members on Tuesday and is expected to do the same on Wednesday at a hearing on the House’s Financial Services Committee.
The hearings took place at a time when steady progress in vaccinations and several rounds of fiscal stimulus improved the outlook for the economy, noted the Fed chief.
Daily coronavirus cases have declined since the peak in early January, and recent economic data, including retail sales, industrial production, contracting and service sector activity, indicated that economic growth accelerated in the new year, after decelerating at the end of 2020. Consumer confidence in the U.S. soared in February for the second month in a row, as Americans were more optimistic about current business and labor market conditions, the Conference Board reported on Tuesday. Still, almost a year after the crisis began in the U.S., the country has about 10 million fewer payroll jobs than in February 2020.