Powell speech: There is risk that lack of fiscal support will show up in economic activity

Following the Federal Open Market Committee’s (FOMC) decision to keep the policy rate unchanged within the target range of 0-0.25%, Jerome Powell, Chair of the Board of Governors of the Federal Reserve System, is delivering his comments on the policy outlook.

Key quotes

“Maximum employment is not something you can reduce to a number like inflation.”

“Maximum employment includes low unemployment, high labour force participation, wage improvements.”

“We’re strongly committed to achieving our goals and the overshoot on inflation. Moderate does not mean well above 2%.”

“We expect the general public to understand the thrust of the new guidance.”

“Over time, the new guidance will provide very powerful support to the economy.”

“There is a broad expectation that there will be more fiscal action, question is how much and when.”

“So far, the economy has proved resilient to the lapse in some CARES Act benefits.”

“There is a risk that lack of fiscal support will show up in economic activity, evictions and other measures.”

About Jerome Powell (via Federalreserve.gov)

Jerome H. Powell took office as Chairman of the Board of Governors of the Federal Reserve System on February 5, 2018, for a four-year term. Mr. Powell also serves as Chairman of the Federal Open Market Committee, the System’s principal monetary policymaking body. Mr. Powell has served as a member of the Board of Governors since taking office on May 25, 2012, to fill an unexpired term. He was reappointed to the Board and sworn in on June 16, 2014, for a term ending January 31, 2028.