The Fed raises its estimates on GDP and inflation.
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More taxes on the rich and on companies.
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April 12, 2021 The US economy, and President Joe Biden, need not fear a rise in interest rates, currently close to zero, at least for this year.
"The Fed does not need to raise interest rates for fear of rising inflation," Fed Chairman Jerome Powell told CBS '60 Minutes, "We can afford to see real inflation first. to act, "Powell also downplayed the risk of higher inflation due to sharp increases in government spending and the budget deficit for Biden's expansionary policies.
Powell stressed that: "The Federal Reserve will support the economy until the recovery is complete", "We will evaluate an interest rate hike when the labor market recovery is complete and when we return to maximum employment and target. inflation at 2%. It will take some time before "this happens, Fed chairman said.
Powell confirmed that US economic growth in the second half of the year will be very strong, as will the growth of the US market. work.
Analysts expect 6-7% growth this year, the fastest rate since the 1980s.
Powell pointed out, however, that the recovery remains uneven, with the unemployment rate among the lowest paid 25% of Americans, at 20%, versus 6% in general.
Powell also recalled that the main risk to the economy remains the pandemic and the disruption of the precautions taken over the past year.
The risk, he concluded: "is that by reopening too quickly, people will go back to their old practices too quickly, and we will see another spike in cases."