FED Chairman Powell Made his Presentation

FED Chairman Powell made his presentation. Powell signaled the Federal Reserve will continue to support the economy.

In his presentation to the US Senate on the FED's Quarterly Monetary Policy Report, the Chairman of the Federal Reserve (FED), Jerome Powell, expressed the expectations of the country's economy to return to a more normal and improved activity in late 2021, while the FED will not withdraw its support for the US economy. Powell said, "We are far from our economic, employment and inflation targets, and it is likely that some time will be passed for significant progress. We should not underestimate the challenges we are currently facing, but developments point to a better outlook later in the year. In particular, progress in vaccination should help speed up the return to normal activities." He also stated that the FED will continue its bond purchase program at its current level. Stating that the road ahead is quite uncertain, the recovery is irregular and far from complete, Powell said: “High levels of unemployment became serious, especially for low-wage workers and Afro-Americans, Hispanics, and other minority groups, and the economic turmoil disrupted many lives and created great uncertainty about the future. As a result, we are at ten million more than our pre-crisis employment level. " Stating that household spending on service sectors that require people to come together, especially entertainment and accommodation, remains low, Powell said that the housing sector is fully recovered, and investment and manufacturing production have increased. Pointing out that the coronavirus epidemic also significantly affected inflation, Powell used the following statements: “After the big drops in the spring, consumer prices have partially recovered for the rest of last year. However, for some of the sectors most adversely affected by the outbreak, prices are particularly weak. In general, inflation on a 12-month basis remains below our long-term target of 2 percent.” Regarding the price stability target, Powell said that they will strive to reach an average inflation of 2 percent over time, which means that following periods of below 2 percent inflation, appropriate monetary policy will aim to reach inflation slightly above 2 percent for a while.       Source: Bloomberg HT