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Fed Chairman Powell said vaccines are good for the medium-term economic outlook. Powell is concerned about the spread of the virus in the United States and around the world.
Federal Reserve Chairman Jerome Powell warned members of Congress that, despite advances in research and development of the new corona vaccine, the U.S. economy is still affected by the outbreak and faces uncertainty.
Powell said in a hearing held by the Senate Banking Committee on Tuesday: “The recent vaccine news is very positive for the medium-term outlook. But for now, there are still major challenges and uncertainties, including the timing of the launch, of the vaccine production and distribution. And how effective is the vaccine for different groups of people. “
Powell also stressed that he was concerned about the spread of the virus in the United States and around the world.
He said: “The increase in new crown cases at home and abroad is worrying and the situation could be serious in the coming months.”
Powell did not suggest how the Fed will respond to these concerns when its next policy meeting is scheduled for December 15-16, but reiterated that it will use all tools to help the economy recover.
financial support
In response to questions from Democratic Ohio Senator Sherrod Brown, Powell said the Fed remains committed to using all tools when needed. Furthermore, he said that the anti-epidemic stimulus bill passed by Congress has shown that it has played a positive role in helping the economy survive the epidemic and that additional tax incentives may still be needed in the future.
Powell admitted in his testimony that economic growth and the job market have increased significantly since the second quarter of this year, but many Americans continue to suffer.
He said: “While we welcome the positive progress that has been made, we will not forget the millions of unemployed Americans.” He also said that many small businesses are likely to close during the winter.
Friction between Fed and Treasury
After a dispute over whether the emergency stimulus plan expires on time, this hearing was the first appearance of Powell and Treasury Secretary Steven Mnuchin.
The US Treasury Department is asking the Fed to deliver unused stimulus funds
Federal Reserve officials urged the extension of all emergency lending facilities, saying they acted as an important economic prop and helped restore market confidence. Most of the emergency stimulus plans will expire on December 31st. But some of them are used very little.
Mnuchin announced in early November that these Fed contingency plans were to be finished on time by the end of December and asked the Fed to return the unused funds authorized by Congress for the plan.
The Fed responded at the time: “I hope the entire contingency plan launched during the coronavirus pandemic will continue to play their important role and provide support to our still tense and fragile economy.”
But even though the two sides had differences, Mnuchin still praised Powell at the hearing, saying the two “always maintained” communication.
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