Fed’s Powell: US economy on a ‘bend’ – CBS ’60 minutes’

(Reuters) – The US economy is at a “turning point” with the expectation that growth and rents will increase in the coming months, but there are still some risks, especially any revival in the coronavirus pandemic, Jerome Powell said , chairman of the Federal Reserve, said.

In a brief preview of a longer interview with CBS’s new magazine program “60 Minutes” that was launched in full on Sunday night, Powell expressed both his recent optimism about the economy and a now-known warning that COVID-19 remains the biggest risk , reflect. .

“We feel we are in a place where the economy is going to start growing much faster and job creation will come in much faster, so the biggest risk to our economy is that the disease will spread again,” Powell said. said. “It’s going to be smart if people can continue to distance themselves socially and wear masks.”

The recent data on the economy was indeed positive, with better-than-expected 916,000 jobs created in March, and some Fed officials suggesting that a million new jobs a month could be possible later this year.

While the pockets of the United States are seeing an upswing in COVID-19 cases, especially in Michigan, the infection rates in large parts of the country are lower than lower, and vaccination of vaccines continues with a one-day record of 4.6 according to A Reuters tracker was given Saturday.

This allowed large parts of the economy to reopen completely. The activity in the entertainment and entertainment sector, which has been hit hardest, has increased significantly in recent weeks as consumers regain the confidence to eat and jump on planes.

Even with the large increase in employment in March, the labor market remains 8.4 million jobs less than in February 2020, just before the pandemic caused a historic downturn, and even less than where the level of employment would now be. did not occur.

The rebound was also uneven. The national unemployment rate is 6%, but 9.6% for Blacks and 7.9% for Hispanics, compared to 5.4% for whites, and 8.2% for those without a high school diploma compared to 3.7% for those with university degrees .

As a result, Powell and fellow Fed policymakers have repeatedly promised not to stop the massive support they offer to the economy soon through near-zero interest rates and $ 120 billion a month in bond purchases.

Last year, they committed themselves to a new operating framework that places the recovery of the U.S. labor market to a ‘maximum’ level of employment as the most important of their two congressional goals. The other is price stability, or keeping inflation over a year-on-year broadly in line with their 2% target.

The new framework builds in the allowances for inflation to go above the level for a while, without them intervening to harness it, measures that usually impose more restrictive conditions that are likely to delay activity and rents.

But their commitment to the pledge will be tested in the coming months with data likely to show an increase in inflation, especially if measured at levels a year ago when the early days of the pandemic pushed consumer demand and prices along with it. has.

However, Powell said on Thursday that the central bank would not nearly reduce its support for the economy and that the coming upswing in inflation readings was likely to be preliminary. And, as in his 60-minute interview, he said the virus still holds the prospect.

“If you listen very carefully to what he said, ‘we’re in a place where we’ll start seeing, we’ll start seeing. “And then he also warns against an increase in the virus,” Nancy Pelosi told CBS ‘Face the Nation immediately after the preview of the interview in Powell. “If we are to grow the economy with confidence, we must crush the virus. They are definitely related. ”