Fed Chairman Affirms “Easy-Money” Strategy
Federal Reserve Chairman Jerome Powell reaffirmed the central bank’s commitment to maintaining easy-money policies until the economy has recovered further from the effects of the coronavirus pandemic, reports the Wall Street Journal. “The economy is a long way from our employment and inflation goals,” he said.
The Fed also will continue to support the economy with near-zero interest rates and large-scale asset purchases until “substantial further progress has been made,” a standard that Powell said “is likely to take some time” to achieve. He added that inflation could be somewhat volatile over the next year and might rise due to a potential burst of spending as the economy strengthens. But that, Powell explained, would be a “good problem to have” in a world where economic and demographic forces have been pulling inflation down for a quarter of a century.