Federal Reserve Chair Jerome Powell holds a information convention following the Federal Reserve’s two-day Federal Open Market Committee Meeting in Washington, July 31, 2019.
Sarah Silbiger | Reuters
Federal Reserve Chairman Jerome Powell stated large questions stay over the outlook for the financial system, notably in mild of ongoing efforts to include the coronavirus pandemic.
In remarks he’ll ship Tuesday to the House Financial Services Committee, the central financial institution chief turned up considerations he had expressed earlier this month about development because the U.S. stays mired ina recession that started in February.
“Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus,” Powell stated.
“A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities,” he added. “The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed.”
His remarks come amid a nationwide spike in coronavirus circumstances rooted in states which have extra aggressively relaxed restrictions applied to include the pandemic.
Powell burdened the significance of constructing on current momentum, which he stated shall be predicated on the path of the virus.
“Many businesses are opening their doors, hiring is picking up, and spending is increasing. Employment moved higher, and consumer spending rebounded strongly in May,” he stated. “We have entered an important new phase and have done so sooner than expected. While this bounceback in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check.”
In response to the pandemic, the Fed has applied a wide range of packages geared toward protecting markets functioning and straight lending the place it is wanted.
The Fed additionally has lower its benchmark short-term lending price to close to zero, the place Powell pledged to hold it till the financial system recovers.
“In March, we lowered our policy interest rate to near zero, and we expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals,” he stated. “We will closely monitor developments and are prepared to adjust our plans as appropriate to support our goals.”