Powell's "60 Minutes" Preview: "The Economy Seems To Be At An Inflection Point" A little over ten years after formed Fed Chair told 60 Minutes host Scott Pelley that "we could raise interest rates in 15 minutes if we have to (but that time is not now)" (and the Fed certainly tried to raise rates ...
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A little over ten years after formed Fed Chair told 60 Minutes host Scott Pelley that "we could raise interest rates in 15 minutes if we have to (but that time is not now)" (and the Fed certainly tried to raise rates only to crash markets finding the hard way it actually can't ever raise rates again without bringing the entire house of cards crashing down), tonight Jerome Powell will also sit down with Scott Pelley on CBS at 7pm, and tell him the U.S. economy is set to make a turnaround, with increased growth that should provide more jobs. Powell spoke with Pelley Wednesday about the state of the economy more than a year after the COVID-19 outbreak.
The Fed chair - who has been busy writing op-eds explaining why the Fed's helicopter money approach is just what the US economy and its soaring but "transitory" inflation needs - also discusses the effectiveness of the tactics employed by the Federal Reserve and Congress to offset the pandemic's economic effects and discusses inflation and other topics.
"What we're seeing now is really an economy that seems to be at an inflection point," Powell said in an excerpt of the interview that aired on "Face the Nation" adding that "that's because of widespread vaccination and strong fiscal support, strong monetary policy support."
And in what may be perceived as the first time Powell has sounded somewhat hawkish on the economy, he said "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."
That said, Powell reiterated that the brightening economic outlook hinges primarily on keeping Covid-19 under control:
“The principal risk to our economy right now really is that the disease would spread again,” he warned. “It's going to be smart if people can continue to socially distance and wear masks.”
Finally, going down the familiar political rabbit hole, Powell concluded that "it's going to be smart if people can continue to socially distance and wear masks", although it would be great if at least he could explain why Texas did just the opposite and the Lone Star state now has record low covid cases. Certainly his pal over at the NIAID Anothny Fauci, had no idea how it is possible that "Texas COVID cases keep dropping despite reopening."
The latest FOMC Minutes published last week made it clear that the Fed has no intention of pulling back its ultra-accommodative monetary policy any time soon, and most likely not before 2024 despite a growing divergence with market views which expect the first rate hike as soon as early 2022. Officials stressed that it would be “some time until substantial further progress” was made on its goals for full employment and inflation that averages 2% over time. As such, they indicated no plans to adjust the current $120BN monthly asset purchase programme, nor any intention to raise interest rates until at least 2024, as their current forecasts suggest.