Powell said the Fed is determined to use all of its tools to fuel the recovery
Federal Reserve Chairman Jerome Powell arrives for a press conference after 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 promised to keep politics loose in a comment for the Wall Street Journal.
The head of the central bank noted the “greatly improved” economy and 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 in a comment. “I firmly believe that we will emerge stronger and better from this crisis, as we have done so many times.”
Powell’s comments came 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 policy 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 to 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.