Federal Reserve chief Jerome H. Powell will tell lawmakers Tuesday that the economy is recovering. While many workers and businesses continue to suffer, the aggressive response from the Central Bank, Congress and the White House has helped avoid the most devastating economic scenarios.
“While the economic impact was real and widespread, swift and forceful action avoided the worst,” Powell will tell the House Financial Services Committee, according to prepared comments.
He will point out that the economy has improved recently, including the labor market, which has returned to jobs after a winter break.
“However, the economic sectors hardest hit by the virus resurgence and greater social distancing remain weak and the unemployment rate – still up 6.2 percent – underestimates the deficit,” Powell said.
The Fed chair will add that the central bank, which currently has near zero interest rates and buys bonds to keep credit flowing and strengthen the economy, “will not lose sight of the millions of Americans who are still injured” .
Mr. Powell will say that the Fed’s numerous market-related programs in 2020 that supported corporate, medium-sized business and local government lending helped “keep organizations from closing down and put employers in a better position to keep workers.” and adjust them again as the recovery continues. “
And he will stress that in most cases the programs have either ended or will end soon. Mr Powell has consistently said that the Treasury Department-sponsored loan efforts were emergency tools that the Fed would stop using once conditions were stable.