Speaking in a two-day long testimony to a US Congressional Senate panel that ended on Wednesday about the recovery of US economy from the pandemic driven fiscal upheaval, Federal Reserve Chair Jerome Powell had reaffirmed the US Central Bank’s stance to keep its benchmark lending rate near-zero until inflation could reach 2 per cent and show signs of sustainability, marking up a move widely contemplated as an effort to solace the big-whale investors who had been out of the seen since the onset of the pandemic outbreak.
In point of fact, latest comment from Fed’s Powell came forth a week after the Federal Reserve had doubled down its effort to leave benchmark borrowing cost at a near-zero level citing a slanderously higher unemployment rate alongside a 1.3 per cent inflation which meant the US economy has been lacking the capital required to propel forward amid a growing grudge among the heavyweight investors due to a haziness brewing beyond the landscape of the world’s No.
1 economy. Nonetheless, US Treasury’s Steven Mnuchin said yesterday that the United States might have just witnessed its fastest recovery from a recession since the Great Depression of 1930s, while Chicago Fed President Evans stroked a strident tone adding that the US economy might have witnessed a rate-hike long before the Federal Reserve’s pledge to keep interest rate steady until at least end-2023.
Interest rates will be at current level, says Fed Vice Chair Clarida
Apart from that, bolstering the view that Fed Chair Powell appeared to have forced to bring in amid a lacklustre US economic growth alongside a softening labour market recovery, in an interview with Bloomberg Television, Fed’s Clarida said later on the day, “Rates will be at the current level, which is basically zero, until actual observed PCE inflation has reached 2%.
That’s ‘at least.’ We could actually keep rates at this level beyond that. But we are not even going to begin thinking about lifting off, we expect, until we actually get observed inflation ... equal to 2%”.