Economy about to grow quicker due to vaccinations, fiscal support

Federal Reserve Chairman Jerome Powell testifies before the Senate Banking Committee hearing on the Quarterly CARES Act Report to Congress on Capitol Hill, Washington, December 1, 2020.

Susan Walsh | Pool | Reuters

The U.S. economy is at a turning point thanks to government support and a swift campaign to vaccinate Americans against Covid-19, Federal Reserve Chairman Jerome Powell said in a new interview.

“What we are seeing now is really an economy that appears to be at a tipping point,” Powell told Scott Pelley during an interview that aired on CBS News on “60 Minutes” on Sunday night. CBS released part of the interview on Sunday.

“We feel in a place where the economy is growing much faster and job creation is much faster,” said Powell. “The main risk to our economy right now is that the disease will spread again. It will be wise if people can continue to distance themselves socially and wear masks.”

Powell’s comments come because US stock indices are at record highs, thanks in part to optimism about the reopening of the economy. Investors will be watching closely next week as the earnings season begins and company executives are making predictions for the year ahead.

The nationwide vaccination campaign has accelerated in recent weeks, with almost every state allowing all adults over the age of 16 to be shot.

In the United States, about 183 million doses of vaccine have been administered, according to the Centers for Disease Control and Prevention. Almost half of the country’s adult population and nearly 80% of those over 65 have received at least one dose, CDC data shows.

Powell, a representative for former President Donald Trump, was a key figure in the federal government overseeing the nation’s response to the financial distress caused by the pandemic.

The Federal Reserve cut its key rate to near zero in March 2020 and launched massive emergency loan programs. Powell says the Fed is unlikely to hike rates until the economy is essentially fully healed, even if inflation rises moderately above its 2% target.

Powell has also supported aggressive federal spending programs implemented under both Trump and President Joe Biden to contain the worst effects of the public health crisis.

The full interview with Powell will air on Sunday at 7 p.m.

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