WASHINGTON – Federal Reserve Chairman Jerome Powell reaffirmed the central bank’s commitment to maintaining easy money policies until the economy has further recovered from the effects of the coronavirus pandemic.
“The economy is a long way from our employment and inflation targets,” Powell said in testimony before the Senate Banking Committee, a statement he has repeated in recent weeks. Therefore, the Fed will continue to support the economy with near-zero interest rates and large-scale asset purchases until “further substantial progress has been made,” a standard that Powell said “will probably take some time” to reach.
Powell delivered the Fed’s semi-annual monetary policy report to committee members on Tuesday and is scheduled to do the same Wednesday at a House Financial Services Committee hearing.
The hearings come as steady progress on vaccines and multiple rounds of fiscal stimulus have improved the outlook for the economy, the Fed chief noted.
Daily coronavirus cases have fallen from their peak in early January, and recent economic data, including retail sales, industrial production, hiring, and service sector activity, have indicated that economic growth accelerated in the new year after slowing in late 2020. US consumer confidence rose in February for the second month in a row as Americans became more optimistic about current business and labor conditions, the Conference Board reported Tuesday . Still, almost a year after the crisis broke out in the US, the nation has about 10 million fewer payroll jobs than in February 2020.