{"id":120461,"date":"2021-04-08T20:00:38","date_gmt":"2021-04-08T20:00:38","guid":{"rendered":"https:\/\/precoinnews.com\/?p=120461"},"modified":"2021-04-08T20:00:38","modified_gmt":"2021-04-08T20:00:38","slug":"feds-powell-warns-on-covid-sees-inflation-unlikely","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/markets\/feds-powell-warns-on-covid-sees-inflation-unlikely\/","title":{"rendered":"Fed's Powell warns on COVID, sees inflation unlikely"},"content":{"rendered":"

(Reuters) – Federal Reserve Chair Jerome Powell on Thursday signaled the central bank is nowhere near to reducing its support for the U.S. economy, noting that an expected rise in prices this year is likely to be temporary, and warning that an uptick in COVID-19 cases could slow the recovery.<\/p>

FILE PHOTO: Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing on “The Quarterly CARES Act Report to Congress” on Capitol Hill in Washington, U.S., December 1, 2020. Susan Walsh\/Pool via REUTERS\/File Photo<\/figcaption>

\u201cCases are moving back up here, so I would just urge that people do get vaccinated and continue socially distancing,\u201d said Powell, who has been vaccinated himself, speaking at an economic forum during the virtual International Monetary Fund and World Bank meetings. \u201cWe don\u2019t want to get another outbreak: even if it might have less economic damage and kill fewer people, it\u2019ll slow down the recovery.\u201d<\/p>\n

Speaking at a separate event, St. Louis Federal Reserve president James Bullard said the Fed should not even discuss changes in monetary policy until it is clear the pandemic is over, tying future Fed discussions tightly to the success of a vaccination program.<\/p>\n

The Fed\u2019s current guidance is that policy discussions will hinge on making \u201csubstantial further progress\u201d towards meeting the central bank\u2019s employment and inflation goals, but Bullard said he regards that as contingent on beating the coronavirus. \u201cWe have to get the pandemic behind us first,\u201d he said. \u201cThere are still risks and things could go in a different direction.\u201d<\/p>\n

The Fed has long said the virus, which touched off the sharpest downturn in decades just over a year ago, will determine the course of the recovery. Some 3 million Americans are getting vaccinated every day, and a majority of older Americans at highest risk of dying from COVID-10 have been fully vaccinated. But new variants are driving surges in caseloads in swathes of the Midwest and Northeast U.S. particularly.<\/p>\n

Meanwhile, much of the world has barely begun mass vaccinations, posing what Powell said was another risk.<\/p>\n

The Fed chair said he expects a surge in spending in coming months as the U.S. economy reopens, along with bottlenecks in supply, to push prices higher this year.<\/p>\n

But, he said, that was unlikely to turn into the kind of year after year price rises that would constitute inflation and require the Fed to react with rate hikes. Also, he said, there are 9 or 10 million Americans still out of work, and they will need support as they try to find new jobs.<\/p>\n

\u201cWe think there will be upward pressure on prices which may be passed along to consumers in the form of price increases – we think that that will be temporary,\u201d Powell said, noting that inflation has been low for 25 years, feeding into a psychology of low inflation expectations.<\/p>\n

\u201cIf inflation were unexpectedly, counter to our expectations, to move meaningfully above levels where we are comfortable – and in particular inflation expectations… if we see them moving persistently and materially above levels we are comfortable with, then we would react to that.\u201d<\/p>\n

The Fed has kept rates near zero for more than a year and has promised to keep them there until the economy reaches full employment, and inflation hits 2% and is on track to exceed that for some time.<\/p>\n

It is also buying $120 billion of bonds each month to further push down on borrowing costs, and has vowed to continue to do so until it sees \u201csubstantial further progress\u201d on both inflation and employment.<\/p>\n

Last month, after Congress approved its latest massive fiscal relief package, Fed policymakers boosted their forecasts for growth, inflation and employment this year; but Powell noted that would not necessarily feed into any policy change.<\/p>\n

To judge whether it was time to reduce asset purchases, Powell said, \u201cwe are not really looking at forecasts for this purpose, we are looking at actual progress\u201d on inflation and employment.<\/p>\n

Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

(Reuters) – Federal Reserve Chair Jerome Powell<\/p>\n","protected":false},"author":3,"featured_media":120460,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23054],"tags":[],"yoast_head":"\nFed's Powell warns on COVID, sees inflation unlikely - Pre Coin News<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/precoinnews.com\/markets\/feds-powell-warns-on-covid-sees-inflation-unlikely\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Fed's Powell warns on COVID, sees inflation unlikely - Pre Coin News\" \/>\n<meta property=\"og:description\" content=\"(Reuters) – Federal Reserve Chair Jerome Powell\" \/>\n<meta property=\"og:url\" content=\"https:\/\/precoinnews.com\/markets\/feds-powell-warns-on-covid-sees-inflation-unlikely\/\" \/>\n<meta property=\"og:site_name\" content=\"Pre Coin News\" \/>\n<meta property=\"article:published_time\" content=\"2021-04-08T20:00:38+00:00\" \/>\n<meta name=\"author\" content=\"mediabest\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:image\" content=\"https:\/\/precoinnews.com\/wp-content\/uploads\/2021\/04\/cnewsfotor1226-2.jpg\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"mediabest\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/precoinnews.com\/markets\/feds-powell-warns-on-covid-sees-inflation-unlikely\/\",\"url\":\"https:\/\/precoinnews.com\/markets\/feds-powell-warns-on-covid-sees-inflation-unlikely\/\",\"name\":\"Fed's Powell warns on COVID, sees inflation unlikely - 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