The US Federal Reserve says the economy is at a “reflection point” Banks News

Powell said the economy would “start to grow faster” as COVID still remained at risk.

Federal Reserve Chair Jerome Powell said the US economy was in a “reflective position” with strong growth and growing vaccines and strong policy support, but the Covid-19 remained a threat.

“We feel like we’ve come to a place where the economy is growing faster and job creation is coming faster,” Powell told CBS’s “Min0 Minutes” in an interview conducted Wednesday, according to a transcript of the interview aired Sunday.

“The outlook has been bright enough. And this is the base case. Although I will say it again, there are really risks,” he said. “The main risk to our economy right now is that the disease will spread again. It would be smarter for people to maintain social distance and wear masks. “

The Fed chair was asked about the economy or other risks to the financial system. The recent collapse of the private hedge fund Archegos Capital Management caused massive losses and intensified financial market volatility. Powell said the incident did not raise questions about the stability of the financial system or what hit these firms, although it was “related” that any single client could suffer so much.

Risk management

“We are determined to understand what happened and to make sure that what happened doesn’t happen again,” he said.

Powell said regulators are investigating why banks think risk-management measures have failed. “What we’re trying to do is make sure the banks understand the risks they’re running and have arrangements in place to manage them,” he said. “It’s going to be a significant shortcoming – a failure on that front. And so that’s something we’re looking for.

For more than a year after the global pandemic, Fed officials have repeatedly stressed that aggressive monetary policy support is needed as the U.S. economy recovers from the pandemic, even after brightening the outlook on vaccine expansion. This naughty outlook has helped push U.S. stocks to record strong highs as investors allay inflation concerns amid strong support from Washington.

Their latest forecast shows that officials will not expect interest rates to rise from near zero before the end of 2023, even though they have sharply boosted projects for growth and employment this year. Some investors are betting that it will work soon.

Powell declined to give a date, but said it was “unlikely we will raise anything like this this year.”

“The Fed will do its best to support the economy as long as it takes to complete the recovery,” he said, noting that many Americans left the workforce during the epidemic – meaning they were not included in the unemployment rate – and “we see those people returning to the workforce.” Will be. “

A few minutes of the central bank’s March meeting, published in April, said policymakers were hoping that “there will be some time until there is substantial further progress” on jobs and inflation. This refers to the tests they set for the scaling of ১২ 120 billion bond purchases per month.

In the second term?

Democrat President Barack Obama is on the Fed board, and Republicans are promoted to the top of the central bank by his successor, Donald Trump. His four-year term as chairman expires in February, and when asked by Democratic President Joe Biden, he gave no indication that he would step down for a second term.

68, Powell repeatedly removed questions about whether he wanted to stay on the job and whether he did so again during the ’60 Minutes’ interview.

Biden, whose party could consider the Fed chair election next month, said last week that he would not talk to Paul since he became president out of respect for the Fed’s independence.

Trump repeatedly used public pressure on Powell and the Fed via Twitter and in speeches, and reprimanded the world for interfering with the world’s most powerful financial authority.

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