Fed's Powell strikes bullish tone, suggesting economy now Covid-proof

The central bank has been buying $120 billion a month in U.S. government debt and mortgage-backed securities

7/29/2021 6:00:00 AM

The central bank has been buying $120 billion a month in U.S. government debt and mortgage-backed securities

The central bank has been buying $120 billion a month in U.S. government debt and mortgage-backed securities.

By07/28/2021 05:15 PM EDTLink CopiedThe Biden administration and U.S. lawmakers are growing increasingly worried about fallout from a new coronavirus surge, but when it comes to the potential risk to the economy, the Federal Reserve isn’t sweating it.

ATEEZ Hit No. 1 on Emerging Artists Chart, While BLACKPINK's Lisa, Chloe Debut in Top Five Kathryn Hahn to Play Joan Rivers in Showtime Limited Series Opinion: Pro-Trump lawyer's memo begins with a lie, then descends into madness

Fed Chair Jerome Powell on Wednesday downplayed concerns that the latest Covid spread tied to the Delta variant could cause significant financial pain to Americans, saying that even though the health consequences could be serious for those infected, the economy has grown more resilient to the virus.

“We’ve kind of learned to live with it,” Powell said at a press conference after the Fed's latest policy meeting, citing the economy's better-than-expected performance after a Covid-19 surge last summer and continued improvement since.“With successive waves of Covid over the past year, there has tended to be less in the way of economic implications from each wave,” he said. “We will see whether that is the case with the Delta variety, but it’s certainly not an unreasonable expectation.” headtopics.com

Powell's take on the threat posed by the virus is being closely watched by investors because it's likely to influence the Fed's decision on how long to continue its extraordinary support for the economy. Since the pandemic began, the central bank has unleashed trillions of dollars to bolster markets. The Fed on Wednesday

gave its first hintthat it’s getting closer to pulling back some of that support, though Powell said a policy change was not imminent.More than 80 percent of new infections of the coronavirus are from the Delta strain, according to the Centers for Disease Control and Prevention, while cases are on the rise in nearly 90 percent of U.S. jurisdictions. That has prompted Republican governors and lawmakers to step up their push for constituents to get vaccinated, while President Joe Biden said this week that a vaccine mandate for all federal employees is under consideration.

Powell acknowledged that this Covid surge could slow the economy by delaying people’s return to the labor force or by leading schools to remain closed for longer. Bond rates have been dropping in recent weeks as investors grow nervous about the prospects for long-term growth.

“It certainly is plausible that people would pull back from some activities because of the risk of infection,” Powell said, but added, “Sitting here today not being able to really know the future, it doesn’t seem as though the effects will be very large.” headtopics.com

Afghanistan girls soccer team given asylum in Portugal In shift, DHS head says images from border 'horrified' him Texas governor signs bill tightening restrictions on abortion-inducing drugs

Still, he emphasized that getting the vaccine would help the economy to return to a more normal state, even as distribution lags in other countries.“As long as there’s time and space for the development of new strains, no one’s really safe,” he said. “As vaccinations rise, we can nonetheless get back to our economic activity.”

The Fed held its benchmark interest rate near zero, and Powell underscored that the central bank was nowhere close to considering rate hikes.The Fed more generally signaled optimism about the U.S. outlook by suggesting that it's closer to a decision on when to curtail its massive purchases of government debt. The central bank has been under growing pressure from Republicans to cut back on the assistance as the economy grows. Economists expect the government on Thursday to report that second-quarter GDP rose by about 8 percent, a blistering pace.

The central bank has been buying $120 billion a month in U.S. government debt and mortgage-backed securities, and officials have been debating when they should start to slow those bond purchases.In its statement after two days of meetings this week, the Fed’s policymaking committee said the economy has made progress toward its goals of maximum employment and averaging 2 percent inflation, “and the Committee will continue to assess progress in coming meetings.”

Powell suggested the central bank had all but ruled out slowing its purchases of mortgage-backed securities before its purchases of U.S. government debt, despite soaring prices in the housing market. He said those types of bond buys feed out to other rates in “very similar ways.” headtopics.com

Read more: POLITICO »

Met Gala Photos 2021: Red Carpet Arrivals

The Met Gala makes its dazzling return, offering a landscape of lavish red carpet looks we’ve come to expect on one of fashion’s biggest nights. Co-chairs of the evening are Timothée Ch…

NPR Cookie Consent and Choicesnooooo i was afraid of this 😭 Actually many studies are saying this, and not just “small” ones. Your reporting has become increasingly irritating. Survivor_Corps LongTermCovid

Covid-19: Health Trusts cancel surgeries as Covid admissions riseThe chief medical officer says the health service is operating under 'huge pressures'. JanePod4

Fed holds rates steady, says sectors most affected by pandemic are showing improvementFederal Reserve officials vote to keep interest rates at current levels, extending the central bank's support for the economy as Covid-19 infection rates surge and vaccination rates stall out.

Reuters Top News @ReutersLIVE: Fed Chair Jerome Powell speaks after policy decision

Doctors Say Symptoms of the Delta Variant Depend on Vaccination StatusMore than 97% of hospitalized COVID-19 patients are unvaccinated, once again stressing healthcare systems.

Sydney Extends Covid Lockdown By Four More Weeks As It Continues To Reel From Delta Variant OutbreakAuthorities in the Australian state of New South Wales announced a four-week extension to its capital Sydney’s ongoing Covid-19 lockdown this is terrible news