A year after COVID-19 hit America's shores, Federal Reserve Chairman Jerome Powell once again doubled down on the easy money policies that have defined the central bank's response to the pandemic-fueled economic downturn.
"At the Fed, we will continue to provide the economy the support that it needs for as long as it takes," Powell told reporters after a meeting of the Federal Open Market Committee on Wednesday.
The pivotal committee, which oversees the county's market operations, has decided to maintain the Fed's current policy of near-zero interest rates and sizable asset purchases, ensuring that "monetary policy will continue to deliver powerful support to the economy until the recovery is complete," Powell said.
The chairman emphasized, however, that the recovery still largely depends on the course of the virus and the measures undertaken to stop the spread.
"Looking back, it was clear that addressing a fast-moving global pandemic would be plainly and primarily the realm of health care providers and experts, and we are grateful to them and to all the essential workers for their service and sacrifice," he said.
He also commended federal lawmakers for taking quick measures to rebuild the economy, calling their fiscal response the "fastest and largest" of any post-war economic downturn.
Addressing possible inflation, Powell noted that the current rate remains below the Fed's 2 percent longer-term objective, though he expects 12-month measures to move up as the very low measures from March and April move out of the equation.
"Beyond these base effects, we could also see upward pressure on prices if spending rebounds quickly as the economy continues to reopen, particularly if supply bottlenecks limit how quickly production can respond in the near-term," he said. "However, these one-time increases in prices are likely to have only transient effects on inflation."
Indeed, he stressed that the ability of the U.S. economy to reach full-employment, part of the central bank's dual mandate from the federal government, in the years ahead requires longer-term inflation expectations be "well-anchored at 2 percent."
Again, he repeated the Fed's goal to keep inflation at around 2 percent so that it averages 2 percent over time. So a momentary jump above the rate, which Powell said is likely this year, would not lead the Fed to change course.
"Overall, our interest rate and balance sheet tools are providing powerful support to the economy and will continue to do so," he explained.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
Cracker Barrel is sticking with its new logo. For now. But the chain is also apologizing to fans who were angered when the change was announced last week.
Elon Musk on Monday targeted Apple and OpenAI in an antitrust lawsuit alleging that the iPhone maker and the ChatGPT maker are teaming up to thwart competition in artificial intelligence.
Hear from Gabino & Stephen Roche on Saphyre’s institutional AI platform that centralizes pre‑ and post‑trade data, redefining settlement speed and accuracy.
