Powell said the Fed remains committed to using all of its tools to fuel the recovery
Federal Reserve Chairman Jerome Powell arrives for a news conference following the Federal Open Market Committee meeting in Washington on December 11, 2019.
Joshua Roberts | Reuters
Federal Reserve Chairman Jerome Powell reiterated his commitment to an “all-in” approach to recovery and in a comment for the Wall Street Journal pledged to keep politics loose.
In view of the “greatly improved” economy, the central bank leader said American determination and aggressive policies had come together to improve prospects for the future.
“But the recovery is far from over, so we at the Fed will continue to give the economy the support it needs while it lasts,” he wrote. “I firmly believe that we will emerge stronger and better from this crisis, as we have done so many times.”
Powell’s comments come two days after the Fed decided to keep the benchmark’s short-term policy rates near zero and continue a program that involves buying bonds worth at least $ 120 billion a month.
Along with these measures, central bank officials have pledged not to change policies until the economy hits full and inclusive job growth, even if that means inflation will run hotter than the Fed’s traditional 2% target for a period of time.
Such an approach is important to sustain the recovery, Powell said.
“The scale of the crisis required a full government response,” he wrote. “Congress delivered its largest stimulus package of the post-war era. At the Fed, we have used all available tools to prevent a financial collapse and ensure that credit continues to flow to households and businesses.”
Powell noted that the greatest impact of the Covid-19 crisis continues to fall on those who can least endure it, underscoring the importance of aggressive policies.
– Read the full Powell commentary here.