At 12 a.m. Friday, Federal Reserve Chairman Jerome Powell participated in an IMF seminar. Powell said that the imbalance in vaccinations around the world poses a risk to the progress of the economic recovery. He emphasized the severity of the unemployment situation.
The recovery now remains uneven and incomplete. The epidemic has hit service sector workers and low-income earners hard, and there are still 9 million to 10 million Americans without jobs, and the Federal Reserve will support them.
The world cannot fully resume economic activity until the new crown outbreak is successfully contained in all places. He urged people to get vaccinated and to continue to maintain social distance because another outbreak would slow the recovery, even though the outbreak may not have as much of an impact on the economy as the initial outbreak.
IMF President Georgieva, on the other hand, noted that the vaccine policy is the economic policy for this year and next, and that premature withdrawal of support measures will delay the recovery. The different speed of recovery in each country poses a risk to financial stability. Georgieva also mentioned that the IMF generally supports the U.S. infrastructure program, but has not yet assessed the potential impact of the infrastructure program on the U.S. outlook.
The seminar also discussed inflation, with Powell reiterating that one-time price increases are not sustained inflation and not to expect price increases due to supply constraints to be repeated. The U.S. has experienced 25 years of low inflation, and now the Fed faces a “tricky” communication challenge in raising inflation expectations.
Powell added.
The Fed should not even discuss policy changes in the United States is still in the recovery phase of the crisis, but will still carefully monitor inflation expectations. The Fed has the tools to curb excessive inflation, the traditional means of dealing with inflation is to raise interest rates.
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