Federal Reserve Chairman Jerome Powell arrives for a news conference after the Federal Open Market Committee meeting in Washington on December 11, 2019.
Joshua Roberts | Reuters
Federal Reserve Chairman Jerome Powell reiterated his commitment to an all-in approach to recovery, promising in a comment to The Wall Street Journal to keep the policy loose.
Looking at the “much better” economy, the head of the central bank said that American determination and aggressive policy combined to make future prospects more optimistic.
“But the recovery is far from complete, so at the Fed, we will continue to provide the economy with the support it needs for as long as it takes,” he wrote in an opinion article. “I really believe that we will come out of this crisis stronger and better, as we have done so many times before.”
Powell’s comments came two days after the Fed voted to keep benchmark short-term loan rates anchored close to zero and to continue a program that involves buying at least $ 120 billion a month in bonds.
Along with these measures came the promise of central bank officials not to change policy until the economy achieves complete and inclusive employment gains, even if it means allowing inflation to stay hotter than the traditional 2% target. Fed for a period of time.
That approach is essential to keeping the recovery going, said Powell.
“The scope of the crisis required a comprehensive government response,” he wrote. “Congress provided its biggest post-war economic recovery package. At the Fed, we used all the tools at our disposal to prevent a financial meltdown and to ensure that credit could continue to flow to families and businesses.”
Powell noted that the biggest impact of the Covid-19 crisis continues to fall on those least able to withstand it, stressing the importance of aggressive policy.
—Read Powell’s full commentary on here.