Globe Live Media- Powell rules out US rate hike “soon” and sees full employment far away

Globe Live Media- Powell rules out US rate hike “soon” and sees full employment far away

In the image, the president of the US Federal Reserve (Fed, central bank), Jerome Powell. EFE / Greg Nash / Archive
 

Washington, Jan 14 (EFE) .- The president of the US Federal Reserve (Fed, central bank), Jerome Powell, stressed this Thursday that he does not foresee an interest rate hike in the US “soon”. noting that the economy is “very far from maximum employment”, while trying to recover activity after the crisis caused by the pandemic.
Powell indicated that he does not expect a hike in the benchmark rates “soon” and added that “now is not the time to think about a way out” of the enormous monetary stimulus deployed.
The latest forecasts from the Fed point to an economic growth in 2021 of 4.2%, after the fall of 2.4% registered last year.
The US central bank has kept interest rates around 0% since March, when it carried out an abrupt cut in the price of money in the face of the arrival of the coronavirus pandemic in the country.
“We are far from maximum employment (…) What we are most focused on is recovering a job market fast enough for people’s lives to go back to where they want them to be,” Powell said in a virtual conversation at the University from Princeton.
The outbreak of the virus in the US in March and the consequent restrictions adopted to stop it sent the unemployment rate to 14.7% in April, a figure not seen in more than 50 years, compared to 3.5% in February.
Since then, and thanks to a huge monetary and fiscal support, it has been reduced to 6.7% with which it closed in December.
It also ruled out the risk in the near future of high inflationary pressures, currently below the annual objective of 2%.
“There is a lot of room in the labor market and it is unlikely that the pressures on wages are going to reach a level that could create and support high inflation,” Powell said.
The next Fed meeting, the first in 2021, is scheduled for January 26-27.

 


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