Federal Reserve Chairman Jerome Powell on Friday said that while the U.S. economic outlook is “brightening,” the recovery is “far from complete.”
In an op-ed published in the Wall Street Journal, Powell recounted the moment last February when he realized that the coronavirus pandemic would sweep across the country.
“The danger to the U.S. economy was grave. The challenge was to limit the severity and duration of the fallout to avoid longer-run damage,” he said.
Powell and his colleagues engineered a rapid response to the crisis, based on the lesson learned from slow recovery to the Great Recession of 2008-2009 that swift action might have been better.
The central bank quickly slashed its policy interest rate to zero and launched an open-ended asset purchase program known as quantitative easing.
With economists penciling in strong growth for 2021 and more Americans getting vaccinated every day, financial markets are wondering how long Fed support will last.
In the op-ed, Powell said the situation “is much improved.”
“But the recovery is far from complete, so at the Fed we will continue to provide the economy with the support that it needs for as long as it takes,” Powell said.
“I truly believe that we will emerge from this crisis stronger and better, as we have done so often before,” he said.
On Wednesday, the Fed recommitted to its easy money policy stance at its latest policy meeting despite a forecast for stronger economic growth and higher inflation this year.
The Fed chairman did not mention the outlook for inflation in his Friday article . Many on Wall Street are worried that the economy will overheat before the Fed pulls back its easy policy stance.
Yields on the 10-year Treasury note
have risen to 1.73% this week after starting the year below 1%.
Stocks were trading lower on Friday, with the Dow Jones Industrial Average
down 187 points in mid-morning trading.