The Federal Reserve Board said Wednesday that the US economy is showing signs of recovery, but not enough to end the monetary easing policy implemented last year.
Extensive vaccination helped boost business activity and employment, but the sector most hit by the Covid-19 pandemic “showed improvement, but not fully recovered.” The Fed’s policy-making Federal Open Market Committee (FOMC) announced a meeting two days later.
The central bank warned that “risks to the economic outlook remain” and said it would monitor economic progress before withdrawing the bond purchase program.
The statement noted the goal of returning full employment and inflation to more than 2% in the long run, “The Commission hopes to maintain a relaxed stance on monetary policy until these results are achieved. I’m doing it. “
The FOMC did not provide any further hints on when bond purchases could be reduced, but Federal Reserve Board Chair Jerome Powell has the opportunity to address this issue at a press conference starting at 1830 GMT.
He promised to warn in advance before making any changes to the purchase of assets.
At the start of the pandemic, the US central bank reduced benchmark lending rates to zero and implemented a large-scale bond purchase program to provide liquidity to the economy.
The Federal Reserve Board is currently purchasing at least $ 80 billion in Treasury debt per month and at least $ 40 billion in government mortgage-backed securities.
Central bankers met at uncertain moments for the world’s largest economy. The rapidly prevailing Delta variant of Covid-19 has prompted re-imposition of mask-wearing rules in some parts of the United States, raising concerns that it could impair recovery.
However, inflation surged as companies reopened as the Covid-19 vaccine became widely available, with the June annual Consumer Price Index (CPI) reaching 5.4%, the highest since August 2008. Reached.
Central bankers were surprised at the magnitude of the surge in inflation, but the statement again attributed the surge to primarily “temporary factors.”
In a testimony earlier this month, Powell said the world’s largest economy still has a “long way” to return to full employment after the Covid-19 pandemic, so there is no urgent need to change banking policies. rice field.
The Federal Reserve Board said it was ready to allow inflation to exceed its 2 percent target for some time to allow the economy to return to full employment after being damaged by Covid-19. I did.
Many private economists agree with the central bank’s assessment that price spikes are temporary and likely to peak in June, but the Fed’s oversight has not yet been eased.
Powell previously said that the surge in prices was caused by the “worst case” of low supply and demand, pointing out issues such as the global semiconductor shortage that is hindering car production.
The Federal Reserve Board says the U.S. economy is showing progress, but “not fully recovered.”
Source link The Federal Reserve Board says the U.S. economy is showing progress, but “not fully recovered.”