Jay Powell said the U.S. economy is at a “turning point” with growth and leasing, but he warned that new rises of Covid-19 could hamper the recovery.
Talk about CBS 60 minutes program, the Chairman of the Federal Reserve delivered a cheerful message on the economic outlook and stressed the critical importance of the ongoing vaccination campaign and the massive stimulus measures introduced so far to maintain momentum.
“We feel like we’re in a place where the economy will start to grow much faster and job creation will come in much faster,” he said in a brief excerpt from the interview conducted on Wednesday. Sunday in full.
“What we are seeing now is really an economy that is apparently on a turning point, and that is because of widespread vaccination and strong fiscal support, strong support for monetary policy,” he added.
The U.S. vaccine program was one of the fastest in the world, according to a record 4.6 million doses on Saturday, according to data from Bloomberg. Doctors hope that soon enough vaccines will be available to slow down the spread of the disease and destroy the number of cases, as has begun to happen in Israel and the United Kingdom.
In the short term, however, Biden government officials are concerned about the spread of the disease in some states such as Michigan, where daily figures have recently reached record highs as young people who are not vaccinated are starting to socialize and catch the virus.
Powell also reiterated Sunday that the brightening economic outlook depends primarily on the retention of Covid-19.
“The biggest risk to our economy now is that the disease will spread again,” he warned. “It’s going to be smart if people can continue to distance themselves socially and wear masks.”
Fed officials have so far maintained that the US economy, despite the sharply improved outlook for growth and inflation, has yet to fully recover. While the March employment report rose sharply, the unemployment rate has continued to rise to 6 per cent and there are about 8 million fewer jobs than before the coronavirus crisis.
The minutes of the central bank’s recent meeting on monetary policy, published last week, also made it clear that the Fed does not intend to withdraw its ultra-accommodative monetary policy any time soon. Officials stressed that it will take some time before the targets for full employment and inflation average 2 percent over time.
As such, they have no plans to adjust the current $ 120 billion monthly asset purchase program, nor any intention to raise interest rates until at least 2024, as their current forecasts suggest.