US Federal Reserve (Fed) Chairman Jerome Powell stated that the ongoing vaccinations in the new type of corona virus (Covid-19) epidemic, economic activity and employment indicators continue to strengthen with the effect of financial incentives.
Powell, at the press conference after the announcement of the bank’s policy rate decision, said that the bank is determined to achieve its monetary policy targets, which include price stability and maximum employment.
Fed Chairman Powell noted that the bank showed that it will continue to strongly support the economy until the economic recovery is complete, by keeping the policy rate and asset purchases unchanged.
Stating that vaccinations and financial incentives also support the economy, Powell said, “Indicators of economic activity and employment continue to strengthen.”
Underlining that a strong economic growth, which has not been seen for decades, is expected this year, Powell said that household expenditures increased due to the opening of the economy, incentives and financial conditions.
Emphasizing that inflation has increased significantly in the USA recently, Powell said, “Contrary to our projections, we raised our expectations with the possibility that inflation may be stubborn.”
“WE WILL NOTIFY BEFORE ANNOUNCEMENT”
Powell said that a decrease in inflation is expected in the coming period, with the temporary effects diminishing, and that inflation in the USA is expected to be 3.4 percent this year, 2.1 percent in 2022 and 2.2 percent in 2023.
Evaluating the bank’s asset purchase program, Powell said, “In the upcoming meetings, the committee will continue to evaluate the progress of the economy towards our goals. As we have said before, we will notify before announcing any changes in our asset purchases.”
Powell stated that a possible interest rate hike in the future will mean that the economy is strong, and noted that monetary conditions will remain loose after the interest rate hike.