Fed’s Clarida Expects Faster Recovery from COVID-19 Compared to Financial Crisis

The United States Federal Reserve will maintain its current policies until the economy recovers from the Coronavirus (COVID-19) pandemic, said the Fed Vice Chair Richard Clarida, Reuters reported.

The Fed’s easing policies “are providing powerful support to the economy and will continue to do so as the recovery progresses.”

“It will take some time for economic activity and employment to return to levels that prevailed at the business cycle peak reached last February. We are committed to using our full range of tools to support the economy until the job is well and truly done.”

The economy is expected to be much more resilient than many forecast or feared one year ago, he further noted, adding that reaching full employment and recovering from the COVID-19 crisis will take much less time than it did after the global financial crisis dozen years ago.

A rise in inflation above 2% until 2023 would be in line with the Fed’s new framework and would be the longest since it introduced its target back in 2012.