Fed’s Powell Vows to Continue Easing until Economy Recovers

The Chairman of the United States Federal Reserve, Jerome Powell, said on Thursday that the Fed will continue its easing policy, keeping interest rates at record low levels for the foreseeable future, until the American economy recovers from the impact of the Coronavirus pandemic.

“When the time comes to raise interest rates, we’ll certainly do that, and that time, by the way, is no time soon.”

Powell said the Fed is committed to using monetary policy tools until the job is well and truly done.

In addition, Powell ruled out ending the bond buying anytime soon, saying that “now is not the time to be talking about exit.”

“A lesson of the Global Financial Crisis is to be careful not to exit too early, and by the way try not to talk about exit all the time…because the markets are listening.”

Referring to the possibility of a rise in the unemployment rate, which could encourage rising rates, the Fed chairman said “that wouldn’t be a reason to raise interest rates, unless we start to see inflation or other imbalances that would threaten the achievement of our mandate.”

“If inflation were to move up in ways that are unwelcome, we have the tools for that, and we will use them. No one should doubt that.”

Moreover, Powell expressed a positive sentiment towards the expectations for the U.S. economy this year, despite noting that the the economy is far from the Fed’s goals

“We were in a good place in February of 2020, and we think we can get back there, I would say, much sooner than we had feared.

“Every economy, and certainly our economy, faces plenty of longer-run challenges.”

“But I would say there were no obvious imbalances that threatened the ongoing expansion. You really can’t identify something that looked like if this blows up, the expansion.”