FED CHAIR SEES ‘VERY STRONG’ GROWTH AHEAD; TRUMP CALLED MCCONNELL ‘LOSER’
WASHINGTON — The U.S. economy is poised for an extended period of strong growth and hiring, the chair of the Federal Reserve said in an interview broadcast Sunday, though the coronavirus still poses some risk.
Chair Jerome Powell, speaking to CBS’ “60 Minutes,” also said that he doesn’t expect to raise the Fed’s benchmark interest rate, currently pegged at nearly zero, this year. And he downplayed the risk of higher inflation stemming from sharp increases in government spending and expanding budget deficits.
“We feel like we’re at a place where the economy’s about to start growing much more quickly and job creation coming in much more quickly,” Powell said. “This growth that we’re expecting in the second half of this year is going to be very strong. And job creation, I would expect to be very strong.”
In the wide-ranging interview, Powell said that the Fed is closely studying the development of a digital dollar, but hasn’t yet made a decision on whether to proceed.
Powell noted that roughly a million jobs were added in March, when revisions to jobs data in January and February are included. The unemployment rate fell to 6% from 6.2%.
“We would like to see a string of months like that,” he said. “That is certainly in the range of possibility.”
Still, there are about 8.4 million fewer jobs than before the pandemic, and Powell acknowledged that he regularly sees a homeless encampment near the Fed’s headquarters in Washington.
“There’s a lot of suffering out there still,” he said.
Powell also said the primary risk to the economy remains the pandemic and a breakdown in precautions that Americans have largely taken for the past year.
The risk ”is that we will reopen too quickly, people will too quickly return to their old practices, and we’ll see another spike in cases,” he said. “The economy should move ahead. But it can move ahead more quickly to the extent we keep the spread of COVID under control.”
Separately, House Speaker Nancy Pelosi was asked Sunday whether Powell’s bullish comments about the economy meant that additional government support for the economy, such as President Joe Biden’s $2.3 trillion infrastructure proposal, was no longer needed.
“No,” Pelosi said. “In fact, if you listen very closely to what he said, we’re at a place where we will ‘begin to see.’ . . . And then he also cautions against a surge in the virus. If we’re going to grow the economy with confidence, we’ve got to crush the virus.”
Powell did say the budget deficit would eventually have to be reduced, but not until the economy has fully rebounded.
“The time to do that is when the economy is strong and we’re fully recovered and people are working and taxes are rolling in,” he said. “The time to do that is not now.”