Powell Says Fed May Soon Scale Back Its Stimulus – By Yuval Rosenberg and Michael Rainey (The Fiscal Times) / Aug 27 2021
Welcome to the weekend! Here’s what happening on the fiscal front as we head into the final days of August.
Federal Reserve Chairman Jerome Powell indicated Friday that he expects the central bank to start pulling back its emergency support for the economy this year as the recovery from the Covid-19 crisis continues.
In prepared remarks released before a virtual version of the annual gathering of bankers and academics at Jackson Hole, Wyoming, Powell said the economic recovery from the pandemic has been remarkably robust, with employment gains coming faster than expected.
“The outlook for the labor market has brightened considerably in recent months,” he said. “The pace of total hiring is faster than at any time in the recorded data before the pandemic. The levels of job openings and quits are at record highs, and employers report that they cannot fill jobs fast enough to meet returning demand.”
At the same time, however, with 6 million people still out of work compared to pre-pandemic levels, the recovery is far from complete, Powell said, so it is too early to tighten monetary policy by raising interest rates. “Today, with substantial slack remaining in the labor market and the pandemic continuing, such a mistake could be particularly harmful,” he warned.
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