Wednesday, May 12, 2021

Fed Powell: US Economic Recovery Depends on Vaccination Campaigns | Business and economic news

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“There is nothing more important to the economy than getting the vaccine,” Powell told reporters at a virtual press conference Wednesday after the two-day Fed policy meeting.

Federal Reserve Chairman Jerome Powell said Wednesday that the economic recovery of the United States depends on the progress of vaccination campaigns.

“There is nothing more important to the economy than getting people vaccinated,” Powell told reporters at a virtual press conference after the two-day Fed policy meeting.

Powell added that he was vaccinated once and expects to receive his second vaccine “soon”.

As expected, Fed policymakers voted unanimously to keep the benchmark central bank interest rate unchanged at near zero. In a post-meeting statement, the Fed said the pace of the rebound in US economic activity from the depths of the COVID-19 crisis has “moderated in recent months with weakness concentrated in the hardest-hit sectors. affected by the pandemic ”.

Powell pointed out these sectors to reporters, noting that nearly half a million jobs were cut by the leisure and hospitality industry in December, “largely in restaurants and bars.”

He also noted – as he has often done – that the economic fallout from the pandemic has disproportionately hit low-wage workers and minorities.

“In particular, the high level of unemployment has been particularly severe for low-paid workers in the service sector. And for African Americans and Hispanics, ”he said.

Powell said that while some sectors of the economy such as housing have fully recovered and sales of durable goods – items designed to last three years or more – and the manufacturing of goods have picked up, “we’re not going to just not being able to get this last group of people back to work and it’s a big group of people, until we have the pandemic behind us ”.

In their post-meeting statement, Fed policymakers reiterated their previous pledge not to increase borrowing costs until the country’s labor market heals – even if that means allowing inflation to overtake. the Fed’s 2% target rate for a while. The Fed has also said it will continue to buy at least $ 120 billion worth of U.S. Treasuries and mortgage-backed securities to help put the economy back on track.

A myriad of economic indicators are signaling that the US economic recovery is faltering and needs a dose of adrenaline.

Weekly jobless claims, an indicator of layoffs, are still stubbornly high, with the latest U.S. Department of Labor reading showing 900,000 people applied for state unemployment benefits in the week ending Jan. 16 – significantly more than the weekly average of 200,000 just before the outbreak of the pandemic. .

The economy lost 140,000 jobs in December and the unemployment rate was 6.7 percent – nearly double the level it was just before the pandemic.

US President Joe Biden has proposed a massive new $ 1.9 trillion stimulus package to accelerate the nationwide vaccination campaign and give more financial assistance to struggling households, small businesses and communities who suffered most of the economic fallout from the pandemic.

The measures include giving an additional $ 1,400 direct cash transfer to eligible Americans – in addition to the $ 600 stimulus checks included in December’s $ 900 billion virus aid round – and the increase in the federal weekly supplement to state unemployment benefits from $ 300 to $ 400.

Democrats now control both houses of Congress – which ultimately controls the nation’s tax and spending policies – but many Wall Street analysts expect horse trading with Republicans to shrink in size and size. scope of the stimulus proposed by Biden.



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