The United States Federal Reserve presented its semi-annual Monetary Policy Report to Congress on Friday.<\/p>\n\n\n\n
The report pointed to the progress in vaccination against the coronavirus (COVID-19) and how it has helped a rebound in growth by reopening the economy, with the accommodative monetary and fiscal policy.<\/p>\n\n\n\n
Nevertheless, the pandemic continues to weigh on the U.S. economy, with employment still below its levels before March 2020, but the second quarter data suggest demand recovery.<\/p>\n\n\n\n
The Fed is vowing to maintain its easing policies to support the economy, expecting the current historically low-interest rates to remain until 2023, with the current pace of asset purchases at $120 billion a month until substantial further progress had been made towards the full employment and price stability targets, with inflation sustainably reaching the 2% level.<\/p>\n\n\n\n
\u201cMonetary policy continues to deliver powerful support to the economy until the recovery is complete,\u201d the report noted.<\/p>\n\n\n\n
This policy, however, could be changed if the inflation rate remains persistently above the 2% target, as the current surge is attributed to transitory factors.<\/p>\n\n\n\n
The Fed admitted that upside risks to inflation in the near term have somewhat increased.<\/p>\n\n\n\n
\u201cAsset prices may be vulnerable to significant declines should investor risk appetite fall, interest rates rise unexpectedly, or the recovery stall,\u201d it noted.<\/p>\n\n\n\n
The report also expected production to pick up and price pressures to ease as supply chain disruptions and bottlenecks are resolved.<\/p>\n\n\n\n
\u201cThe time frame for the resolution of these bottlenecks is uncertain, as they reflect both the global supply chain and some industry-specific reasons for the tight conditions.\u201d<\/p>\n\n\n\n
These supply chain bottlenecks have played a part in the Fed views as temporary upward pressure on inflation.<\/p>\n\n\n\n
But inflation expectations are in a range that broadly consistent with the longer-run inflation objective, according to the report.<\/p>\n\n\n\n
As for employment, the Fed said that the post-pandemic labor market and maximum employment could be different from the pre-pandemic period.<\/p>\n\n\n\n
It is worth noting that the Fed Chair Jerome Powell is set to testify before the House of Representatives and the Senate on Wednesday and Thursday, respectively.<\/p>\n\n\n\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
The United States Federal Reserve presented its semi-annual Monetary Policy Report to Congress on Friday. The report pointed to the progress in vaccination against the coronavirus (COVID-19) and how it has helped a rebound in growth by reopening the economy, with the accommodative monetary and fiscal policy. Nevertheless, the pandemic continues to weigh on the …<\/p>\n","protected":false},"author":10,"featured_media":32340,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[6827,49],"tags":[6867],"class_list":["post-48184","post","type-post","status-publish","format-standard","has-post-thumbnail","","category-daily-economic-reports","category-economic-reports","tag-federal-reserve"],"_links":{"self":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/48184","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/comments?post=48184"}],"version-history":[{"count":1,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/48184\/revisions"}],"predecessor-version":[{"id":48185,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/posts\/48184\/revisions\/48185"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media\/32340"}],"wp:attachment":[{"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/media?parent=48184"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/categories?post=48184"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/noortrends.ae\/en\/wp-json\/wp\/v2\/tags?post=48184"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}