By Yasin Ebrahim
GossipMantri.com – Federal Reserve Chairman Jerome Powell is expected to acknowledge that economic activity has improved, but reiterates the Federal Reserve’s commitment to maintain loose monetary policy measures as the outlook remains uncertain. according to prepared remarks from his testimony in Congress scheduled for Tuesday.
“Economic activity has recovered from its depressed level in the second quarter, when much of the economy was shut down to stem the spread of the virus. Many economic indicators show marked improvement,” Powell told the Services Committee financial institutions in the United States House of Representatives.
“Since mid-March, we have taken strong action, implementing a near zero rate policy, increasing our holdings and putting in place 13 emergency lending facilities.”
Powell will also acknowledge the rebound in the economy since the pandemic hit in March, but will continue to suggest that the Fed “remains committed to using our full suite of tools to support the economy for as long as necessary.”
“In the labor market, about half of the 22 million salaried jobs lost in March and April have been clawed back as people return to work.” However, employment and overall economic activity remain well below their pre-pandemic levels the way forward remains highly uncertain.
The Fed chief will continue to call on Congress to deploy budget support to maintain the current pace of the recovery.
Many borrowers will benefit [the Fed’s] programs, just like the economy as a whole, but for others, a loan that might be difficult to repay might not be the answer. In these cases, direct tax support may be necessary, ”commented prepared from Powell’s testimony said.
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