February 23, 2021 12:41 PM | With information from EFE
15 minutes. The president of the Federal Reserve (FED) of the United States (USA), Jerome Powell, affirmed on Tuesday that the coronavirus pandemic left a “significant mark” on inflation, but is not a threat to the economy. In fact, he pointed to an “improvement” in the outlook for the second half of the year.
“The pandemic has left a significant mark on inflation (…). For some of the sectors that have been most severely affected, prices remain particularly weak“This was stated by Powell in his appearance before the banking committee of the US Senate to offer his semi-annual report on monetary policy.
However, the president of the FED said that “in general, and In the accumulated of the last 12 months, inflation continues to be below our objective of 2% long-term”.
He also insisted that the US economy is still “far away” from its economic objectives and stressed that it will take “a while” to return to levels prior to the pandemic. Therefore, the extraordinary monetary stimulus will be maintained.
The American central bank abruptly lowered benchmark interest rates to around 0% with the arrival of the pandemic in March 2020. In addition, it made multi-million dollar injections of liquidity through the purchase of debt.
Hopeful with caution
However, he showed cautious optimism for the future.
“Although we should not underestimate the challenges we currently face, events point to an improvement in prospects for later in the year. In particular, does continued progress in vaccines help speed the return to normal activities, “Powell said.
The latest forecasts from the central bank point to an economic growth in 2021 of 4.2%. This, after the fall of 2.4% registered last year.
The unemployment rate, which went from 3.5% in February 2020 to 14.7% in AprilWhen the COVID-19 pandemic had the greatest impact, it has been declining every month since then. In the last quarter of 2020, it remained at numbers close to 7%, which indicates a stagnation in the labor market.
The FED’s next monetary policy meeting is scheduled for March 16-17.