Federal Reserve, Jerome Powell (AP Photo / Susan Walsh, Pool)
The Fed raises its estimates on GDP and inflation.
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April 12, 2021 One of the risks for the recovery is the hasty reopening of the economy that could spike Covid-19 cases again.
This was stated by the chairman of the Federal Reserve, Jerome Powell, in '60 Minutes', an interview with CBS.
"There are really risks out there. And the main one is that if we reopen too quickly, people will go back to old habits too quickly and we will see another spike in cases," he explained.
The impact of vaccinations should mean that any spike in cases won't be as severe and won't have the same disastrous effects on public health and the economy as previous spikes.
But Powell pointed out that the economic recovery will "move forward even more rapidly as we keep the spread of the virus in check."
"It will be smart if people can continue to distance themselves socially and wear masks."
The Federal Reserve intends to "maintain support for the economy until the recovery is largely complete."
The Fed will therefore not change its current policy of near-zero interest rates and bond purchases of $ 120 billion a month now.
"We will consider an interest rate hike when the labor market recovery is complete and when we return to maximum employment and the 2% inflation target. It will take some time for this to happen," he explained.
Powell finally made a distinction between the Fed's intention to run inflation "moderately" above its 2% target and anything faster than that.
"We don't want inflation to materially rise above 2% and go back ... to the bad, old days of inflation" of the 1970s, he said.