The Globe News
WASHINGTON. – The Federal Reserve (Fed, Central Bank) will keep its rates low while the inflation does not exceed 2% in a lasting way and the economy approaches full employment, said the president of the organization, Jerome Powell, on Tuesday.
Speaking to senators, Powell said there is a long way to go before seeing significant progress in the job market, adding that "coronavirus vaccines should hasten economic recovery and offer a glimmer of hope for a return to more normal conditions." this year".
In the middle of the pandemic, the Fed lowered its reference interest rates to minimum levels of 0 to 0,25% in March, which it has no intention of raising in the short term.
It will also maintain its asset purchases "at least at the current level" until "substantial progress" is seen toward the goals set by the agency, Powell said.
"The pandemic also left a strong mark on inflation," the Fed chief commented.
Fears about a possible rise in prices in the coming months have been multiplying for weeks in the markets, although they are ruled out by the government, the Fed and the IMF.
After sharp declines in the spring (boreal 2020), consumer prices rose partially for the rest of the year, but remain weak in several sectors particularly affected by the pandemic, Powell said.
“Twelve months ahead, inflation remains below our 12% target,” he noted.
The chief economist of the IMF, Gita Gopinath, recently said that the IMF forecasts point to an inflation of 2,25% in 2020 in the United States.
The aid plan for 1,9 trillion dollars presented by President Joe Biden, which Congress is discussing, raises some fears about an overheating of the economy that could push prices up due to an increase in demand. Source Diario Las Americas
External photo courtesy