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Fed’s Powell: The US economy is at an ‘inflection point’

© Reuters. FILE PHOTO: Federal Reserve Chairman Jerome Powell listens during Senate Banking Committee hearing in Washington

By Dan Burns

(Reuters) – The US economy is at a “inflection point” with the expectation that growth and recruitment will accelerate in the coming months, but some risks remain, especially any resurgence in the world. coronavirus epidemic, Federal Reserve Chairman Jerome Powell said.

In a brief preview of a longer interview with CBS news magazine program “60 Minutes” which will air in full on Sunday night, Powell echoed his recent optimism about the economy. and a now familiar warning that COVID-19 remains the primary risk.

“We feel like we’re in a place where the economy is about to start growing much faster and job creation comes in much faster, so the main risk to our economy right now is really. the disease is spreading again, ”said Powell. “It would be smart if people could continue to distance society and wear masks.”

In fact, recent data on the economy as a whole is positive, with 916,000 better jobs than expected to be created in March and some Fed officials arguing the possibility of one million jobs. new every month later this year.

While the US pocket is seeing an increase in COVID-19 cases – especially in Michigan – infection rates in many parts of the country are at their lowest in months, and development Vaccination continued to take place with a one-day record of 4.6. One million doses were given on Saturday, according to a Reuters tracker.

That has allowed a whole host of economies to reopen more completely. Activity in the most impacted entertainment and entertainment sectors has increased significantly in recent weeks as consumers regain confidence to continue eating and flying.

However, even with the huge increase in jobs in March, the labor market still lacked 8.4 million jobs compared to February 2020 levels, just before the pandemic caused a calendar recession. in history, and even in short supply compared to current employment levels. pandemic never happened.

The rebound is also uneven. The national unemployment rate is 6%, but for blacks it is 9.6% and for Hispanics it is 7.9% compared to whites it is 5.4% and for those without a high school degree is 8.2% compared with people with university degrees is 3.7%.

That’s why Powell and Fed policymakers have repeatedly promised not to give up anytime on the massive support they are providing to the economy through near zero interest rates and $ 120 billion per month to buy bonds.

Last year, they committed to a new operational framework that placed the restoration of the US labor market at “maximum” levels of employment paramount of two goals mandated by Congress. The second is to stabilize prices, or keep broad-based inflation in line with their target of 2% annually.

The new framework is designed to allow inflation to exceed that level for a period of time without intervening to curb, measures often involving the imposition of more restrictive conditions that are likely to slow down. recruitment and recruitment.

But their pledge to that commitment will be tested in the coming months with data likely to show rising inflation, especially when measured against the level a year before the early days of the era. The translation crushed consumer demand and the price tag with it.

Most recently on Thursday, however, Powell said that the central bank does not want to reduce its support for the economy and that the forthcoming rise in inflation may be temporary. And, as in his “60 Minutes” interview, he says that viruses continue to dominate the outlook.

“If you listen closely to what he said, ‘we are in a place where we will begin to see, we will begin to see.’ And then he warned against the proliferation of the virus, ”US House Speaker Nancy Pelosi said on CBS’s” Face the Nation “channel shortly after a preview of Powell’s interview was shown. “If we are confident in developing the economy, we have to destroy the virus. They are definitely involved.”



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