Federal Reserve Chairman Jay Powell is doubling down on his commitment to do all in his agency’s power to keep financial markets functioning and liquid.
“We are committed to using our full range of tools to support the economy in this challenging time even as we recognize that these actions are only a part of a broader public-sector response,” Powell said in prepared testimony for a Tuesday hearing of the Senate committee on banking, housing, and urban affairs.
Powell noted that the Fed had taken its policy interest rate to near zero percent as the conronavirus pandemic forced shutdowns of much of the economy in March. “We expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals,” he said in his prepared testimony.
In a weekend interview on CBS’s 60 Minutes, Powell said the U.S. can expect a gradual and likely bumpy recovery as lockdowns are lifted during the coronavirus pandemic, but he added that a full-blown sequel to the Great Depression isn't likely.
TheStreet’s Jim Cramer noted Monday that Powell will do “whatever is necessary,” to help the economy recover and that he is particularly sensitive to the massive surge in unemployment.
Indeed, Powell’s testimony for Tuesday’s hearing opens by “acknowledging the tragic loss and tremendous hardship that people are experiencing both here in the United States and around the world,” adding that “the burdens are falling most heavily on those least able to carry them.”
U.S. markets rose sharply Monday to their highest closes since early March on positive early results in a covid-19 vaccine trial, and on signs the U.S. economy is reopening faster than some had expected.