Fed Warns US Faces Long Road To Recovery

50
704

Fed Warns US Faces Long Road To Recovery

The head of America’s central bank has pledged to continue support for the US economy for “as long as it takes”.

Warning that the US faces a “long road” to recovery, Federal Reserve Chair Jerome Powell said the bank would keep interest rates near zero for the foreseeable future.

A policymaker forecast released by the Fed showed rates remaining low until the end of 2022.

“This is going to take some time,” Mr Powell said.

In December, Fed policymakers said they expected the US economy to grow about 2% this year and the unemployment rate to remain around 3.5%.

But the pandemic has dramatically rewritten that outlook, prompting the loss of more than 20 million jobs in March and April in the US alone.

The OECD on Wednesday said the pandemic had triggered the most severe recession in a century and warned that the global economy could contract 7.6% this year, should a second outbreak hit.

Predictions released by the Fed on Wednesday show policymakers expect the US economy to shrink 6.5% this year and the unemployment rate to be 9.3%, before falling to 6.5% in 2021.

That would still be a big increase from the 3.5% rate recorded in February.

‘Aggressive action’

Fed Warns US Faces Long Road To Recovery

The Federal Reserve slashed interest rates toward zero at the onset of the pandemic and has pledged to maintain low rates until the economy is back on track.

It has pumped trillions of dollars into the financial system, buying up US Treasuries and other assets to encourage banks to keep lending and prevent a market collapse.

Fed Warns US Faces Long Road To Recovery

It has also stepped in with new programmes to lend to small and medium-sized firms and buy corporate and municipal debt.

The swift action has won widespread praise in Washington. In a hearing about the pandemic response on Wednesday, Republican Senator John Kennedy called Mr Powell a “rock star”.

Neil Birrell, chief investment officer at Premier Miton, said the Fed’s statement on Wednesday was “affirmation of central banks everywhere doing what they need to do”.

Analysts credit the Fed’s aggressive response with helping to drive a rally in financial markets, which have rebounded sharply from their lows.

Fed Warns US Faces Long Road To Recovery

Mr Powell on Wednesday said financial conditions had improved, thanks to the Fed’s efforts to keep markets from freezing up.

He defended the bank’s plan to continue asset purchases at the current levels, despite criticisms that such moves primarily help wealthy investors.

Fed Warns US Faces Long Road To Recovery

“We don’t take those gains for granted,” Mr Powell said.

No change in interest rates at this meeting, and it seems most of the Fed’s policy makers expect no change before 2023.

One of the documents released alongside the policy statements is a summary of the expectations of the Fed’s policy makers.

https://www.bbc.com

It doesn’t identify individuals, but it does give us some indication of what they’re thinking, if not exactly who is thinking it.

None expect rates to rise this year or next. There is at least one who thinks there will be a rise of a full percentage point in 2022. But the majority think that won’t happen.

On growth the most optimistic thinks this year will see a contraction of 4.2%. One expects a pretty hideous figure of 10%.

Formula 1 Mercedes Conduct Two-Day Test

Most expect a return to growth next year. But if you take the median – the one in the middle if you rank them – it will be 2022 before this year’s losses are fully recovered.

The cumulative picture for that projection is an economy 1.6% larger in that year than it was last year.

That suggests, for that period, more than two years of lost growth, at the rate they think is likely over the long term.

Fed Warns US Faces Long Road To Recovery

50 COMMENTS

  1. I don’t even know how I stopped up here, but I thought this submit was good. I don’t recognise who you’re however certainly you are going to a well-known blogger in case you are not already 😉 Cheers!

  2. I am really impressed with your writing skills and also with the layout on your blog. Is this a paid theme or did you modify it yourself? Anyway keep up the nice quality writing, it’s rare to see a great blog like this one today..

  3. I used to be recommended this website by means of my cousin. I am now not positive whether this submit is written by means of him as no one else know such targeted about my problem. You’re amazing! Thanks!

  4. I’ve been absent for a while, but now I remember why I used to love this website. Thank you, I’ll try and check back more frequently. How frequently you update your web site?

  5. Thanks for any other excellent post. Where else may just anyone get that kind of information in such a perfect manner of writing? I have a presentation subsequent week, and I’m on the look for such info.

  6. Does your blog have a contact page? I’m having a tough time locating it but, I’d like to shoot you an email. I’ve got some ideas for your blog you might be interested in hearing. Either way, great site and I look forward to seeing it develop over time.

  7. I haven’t checked in here for a while because I thought it was getting boring, but the last few posts are good quality so I guess I’ll add you back to my everyday bloglist. You deserve it my friend 🙂

  8. A person essentially help to make seriously posts I might state. This is the very first time I frequented your web page and so far? I amazed with the research you made to make this particular put up incredible. Excellent task!

  9. hey there and thank you for your information – I’ve certainly picked up anything new from right here. I did however expertise a few technical issues using this web site, since I experienced to reload the site a lot of times previous to I could get it to load correctly. I had been wondering if your web host is OK? Not that I’m complaining, but sluggish loading instances times will very frequently affect your placement in google and can damage your quality score if ads and marketing with Adwords. Well I’m adding this RSS to my e-mail and can look out for much more of your respective exciting content. Make sure you update this again very soon..

  10. Howdy just wanted to give you a brief heads up and let you know a few of the pictures aren’t loading properly. I’m not sure why but I think its a linking issue. I’ve tried it in two different browsers and both show the same results.

  11. I am commonly to blogging as well as i really value your web content. The article has actually peaks my passion. I am mosting likely to bookmark your website and also keep checking for brand-new info.

  12. Get help to stop drinking. Helping women quit drinking alcohol. Coach Mary Wagstaff. Feel better, mind, body and soul. Mindfulness based coaching and alcohol recovery. Yoga for recovery.

  13. I in addition to my buddies have been checking the great hints from your web page and then then I had a terrible feeling I had not expressed respect to the site owner for them. My guys had been as a result happy to read through all of them and now have pretty much been taking pleasure in those things. I appreciate you for getting really kind as well as for using this kind of decent subjects most people are really wanting to be informed on. Our honest apologies for not expressing gratitude to you sooner.

  14. I’m really loving the theme/design of your weblog. Do you ever run into any browser compatibility issues? A couple of my blog readers have complained about my site not working correctly in Explorer but looks great in Safari. Do you have any recommendations to help fix this issue?

  15. Usually I don’t read article on blogs, however I wish to say that this write-up very compelled me to take a look at and do it! Your writing taste has been amazed me. Thanks, quite great article.

  16. Hi, i think that i saw you visited my website so i came to “return the favor”.I’m trying to find things to enhance my website!I suppose its ok to use a few of your ideas!!

  17. Arx Nimbus’ Thrivaca Risk Analytics Platform provides the first financially-relevant Digital Risk Profile for the enterprise, underwriters and brokers. Using a patented algorithm developed in collaboration with leading universities, the DoD and federal regulators, Thrivaca consolidates industry historical analysis, your latest analyses and assessments, proprietary vulnerability scans, audit data and actuarial mathematics to produce a complete and detailed valuation of enterprise-wide digital risk, and the top sources of current carrying cost.

  18. When I initially commented I clicked the “Notify me when new comments are added” checkbox and now each time a comment is added I get three emails with the same comment. Is there any way you can remove people from that service? Appreciate it!

  19. I feel that is one of the most important info for me. And i am glad reading your article. However want to commentary on some basic issues, The site style is ideal, the articles is actually excellent : D. Just right activity, cheers

  20. Hi there! I know this is somewhat off topic but I was wondering if you knew where I could get a captcha plugin for my comment form? I’m using the same blog platform as yours and I’m having problems finding one? Thanks a lot!

  21. Hi there, just became aware of your blog through Google, and found that it’s truly informative. I’m going to watch out for brussels. I will appreciate if you continue this in future. Lots of people will be benefited from your writing. Cheers!

  22. Wow, wonderful weblog format! How lengthy have you been running a blog for? you make running a blog look easy. The total look of your site is great, as well as the content!

  23. Unquestionably believe that which you said. Your favorite reason seemed to be on the net the simplest thing to be aware of. I say to you, I certainly get annoyed while people consider worries that they just don’t know about. You managed to hit the nail upon the top and defined out the whole thing without having side-effects , people can take a signal. Will likely be back to get more. Thanks

  24. After research a few of the article on your web site now, and I genuinely like your means of blogging. I bookmarked it to my book mark site list and also will certainly be inspecting back soon. Pls check out my web site also and also let me understand what you assume.

LEAVE A REPLY

Please enter your comment!
Please enter your name here