Fed: ‘Range of tools’ in play to counter pandemic

WASHINGTON— The Federal Reserve is promising to use its “full range of tools” to pull the country out of a recession brought on by a global pandemic, signaling that it would keep interest rates low through 2022.

In its semi-annual monetary policy report to Congress, the central bank said Friday that the COVID-19 outbreak was causing “tremendous human and economic hardship across the United States and around the world.”

In response, the Fed said it’s “committed to using its full range of tools to support the U.S. economy.”

The Fed’s report comes two days after the central bank kept its benchmark interest rate at a record low of zero to 0.25% and signaled that it planned to keep it there through 2022. The Fed said it would continue to buy billions of dollars of Treasury and mortgage-backed securities to support the financial market.

Federal Reserve Chairman Jerome Powell will testify before congressional committees next week on the new report.

Powell predicted recovery will likely be slow.

Powell’s downbeat assessment of how long it could take labor market to recover along with other fears about the pandemic helped trigger a selloff in the market Thursday with the Dow Jones industrial average falling 1,861.82 points, or 6.9%.

After the market plunge, President

Donald Trump sent out a tweet criticizing the Fed.

“The Federal Reserve is wrong so often,” Trump tweeted. “I see the numbers also, and do MUCHbetter than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021.”

The Fed noted a sharp deterioration in the labor market with nearly 20 million jobs lost since February.

“The most severe job losses have been sustained by the socioeconomic groups that are disproportionately represented among low-wage jobs,” according to the report.

The Fed, Powell said, remains focused on laying the foundation for a return to a strong labor market.