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Fed's Powell: U.S. economy at an 'inflection point' - CBS '60 Minutes'

EconomyApr 11, 2021 07:55PM ET
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2/2 © Reuters. FILE PHOTO: Chair of the Federal Reserve Jerome Powell listens during a Senate Banking Committee hearing in Washington 2/2

By Dan Burns and Howard Schneider

(Reuters) - The U.S. economy is at an "inflection point" with expectations that growth and hiring will pick up speed in the months ahead, but also risks if a hasty reopening leads to a continued increase in coronavirus cases, Federal Reserve Chair Jerome Powell said.

In an interview on the CBS news magazine "60 Minutes" that aired on Sunday night, Powell echoed both his recent optimism about the economy and a now-familiar warning that the COVID-19 pandemic had not yet been fully defeated.

"There really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we'll see another spike in cases," Powell said in the interview, recorded on Wednesday.

The impact of vaccinations should mean any coming spike in cases is not as severe and does not have the same disastrous effects on public health and the economy as prior surges. But Powell said the economic recovery will still "move ahead more quickly to the extent we keep the spread of COVID under control."

"It's going to be smart if people can continue to socially distance and wear masks."

Chairs of the U.S. Federal Reserve appear only rarely on widely-aired broadcast shows like "60 Minutes" though Powell has used that type of platform several times during the pandemic to explain Fed policy and, in the beginning, to try to calm fears about a full-on economic collapse.

A year later, data on the economy has been positive by and large, with a better-than-expected 916,000 jobs created in March and some Fed officials suggesting a run of a million new jobs a month is possible later this year.

Powell said the base case forecast is for "very strong" job growth in the months ahead, and that it is "in the range of possibility" for the U.S. to see "quick progress to maximum employment."

Those hardest hit by the pandemic, including low wage workers in the service sector, could see their jobs return with relative haste in coming months as more and more activities are considered safe to resume, Powell said.

But Powell reiterated that the Fed is not about to change its current policy of near zero interest rates and bond purchases of $120 billion per month.

Officials intend to keep support for the economy in place until the recovery is largely complete, and "stick with those people and support them as they try to get back to where they were in life, which was working."

While pockets of the United States are seeing an upswing in COVID-19 cases - in Michigan in particular - infection rates in large parts of the country are at multi-month lows, and the vaccine rollout continues apace with a one-day record of 4.6 million doses given on Saturday, according to a Reuters tracker.

That has allowed wide swaths of the economy to more fully reopen. Activity in the hardest-hit leisure and entertainment sectors has picked up significantly in recent weeks as consumers regain the confidence to resume dining out and hopping on airplanes.

Still, even with March's big increase in employment, the labor market remains 8.4 million jobs short of where it was in February 2020, just before the pandemic triggered an historic downturn, and even further short of where the level of employment would be now had the pandemic never occurred.

The bounce back has also been uneven. The unemployment rate is 6% nationally, but is 9.6% for Blacks and 7.9% for Hispanics versus 5.4% for whites, and 8.2% for those without a high school diploma versus 3.7% for those with college degrees.

A new Fed framework puts more weight on job creation, and builds in allowances for inflation to run above the central bank's 2% target for a time without the Fed intervening to rein it in.

Powell drew a distinction between the Fed's intent to let inflation run "moderately" above its 2% target, and anything faster than that.

"We don't want inflation to go up materially above 2% and go back to...the bad, old inflation days," of the 1970s, Powell said.

Powell said as recently as Thursday that a coming upswing in inflation readings is likely to be transitory and won't cause the Fed to change it plans for monetary policy.

Fed's Powell: U.S. economy at an 'inflection point' - CBS '60 Minutes'
 

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Comments (21)
Alan Rice
Alan Rice Apr 12, 2021 11:33AM ET
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It's refreshing to listen to an honest Gov't Servant after 4 years of the last administration. Thankyou, Mr. Chairman !!
Adam Paine
Adam Paine Apr 11, 2021 11:33PM ET
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it's funny that spam doesn't hit the articles made for bulls.
Dave Jones
Dave Jones Apr 11, 2021 9:49PM ET
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I think you're deliberately letting the spam in because you don't want real people to be heard!
Adam Paine
Adam Paine Apr 11, 2021 9:49PM ET
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1000%
William Smith
William Smith Apr 11, 2021 8:47PM ET
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How funny, the FED is printing $120 billion a month out of thin air to buy bonds. That's $144 TRILLION a year. Tictoc, tictoc, tictoc.
Bret Lafrance
Bret Lafrance Apr 11, 2021 8:47PM ET
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Math Major?
Dave Jones
Dave Jones Apr 11, 2021 8:47PM ET
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It's Maths! short for mathematics! Have you heard of physic or calculu?
Catharine Varady
Catharine Varady Apr 11, 2021 8:47PM ET
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120billion x 12 = 144 trillion. i guess he forgot . after 1 in 144
Invest Right
Invest Right Apr 11, 2021 8:32PM ET
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What's with the spam??? It has made the comments section useless.
James Andersen
James Andersen Apr 11, 2021 8:32PM ET
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I thought it mostly was before the spam too. Lol
William Smith
William Smith Apr 11, 2021 8:22PM ET
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How funny. Fed to continue purchasing $120 billion dollars worth of bonds each month with money that doesnt exist. Tictoc, tictoc, tictoc.
Gene Kret
Gene Kret Apr 11, 2021 8:19PM ET
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60 Minutes?? Are you sure it was even Powell? Garbage news network. F- CBS
Emmanuel williard
Emmanuel williard Apr 11, 2021 7:38PM ET
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hello ketty
Vicki Lynn
Vicki Lynn Apr 11, 2021 7:26PM ET
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Is this site run by China?
Lake Lot
Lake Lot Apr 11, 2021 7:26PM ET
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Ya see sung fung
Ernie Keebler
Ernie Keebler Apr 11, 2021 5:50PM ET
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Since when did this become an ad spot for get rich quick schemes
Roger Miller
Roger Miller Apr 11, 2021 4:55PM ET
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Is this the same “60 Minutes” that edited the DesSantis interview to mislead people?
Jason Urps
Jason Urps Apr 11, 2021 2:54PM ET
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"The unemployment rate is 6% nationally, but is 9.6% for Blacks and 7.9% for Hispanics versus 5.4% for whites". Why do they continue to split the numbers amongst race? Our race is AMERICANS. Men, Women, Transgender, Black, White, Hispanic, Asian, Pacific Islander, etc etc does not matter we as a whole are AMERICA. All of us are equal as human beings.
Дмитрий Сильвестров
Дмитрий Сильвестров Apr 11, 2021 2:54PM ET
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Might be Blacks and Hispanics want to have figures for making whites guilty and responsible ?;-)
Scott Jones
Scott Jones Apr 11, 2021 2:54PM ET
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bc pelosi likes to virtue signal for votes
Options Trader
Options Trader Apr 11, 2021 2:54PM ET
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How else would they divide people so they can gain more power?
Eudon Hickey
Eudon Hickey Apr 11, 2021 1:27PM ET
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Not sure if you can believe this CBS 60 min, as they edit everything
Chris Vu
Chris Vu Apr 11, 2021 1:22PM ET
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What the heck with all these advertisements?
Tyler Phillils
Tyler Phillils Apr 11, 2021 1:15PM ET
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I see that https://investing.com has lost control of their comments section to ad spammers. Start reporting the spam...
Steve Lora
Steve Lora Apr 11, 2021 12:30PM ET
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Blacks with high unemployment numbers is nothing new when a Democrat is president.
Chris Vu
Chris Vu Apr 11, 2021 12:30PM ET
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The job market is always very competitive for all people. Unless you have a good education it's hard to get a job just out school, which will give you something to put on the resume. That's why parents need to get involved with their children's education from when they were young. However, there are situations where many underprivileged families do not have the resources to give their children the tools to succeed. Democrats or Republicans have nothing to do with high unemployment numbers on Blacks, Whites, Hispanics or Asians. The bottom line pretty much depends on the individuals.
Tyrone Jackson
Tyrone Jackson Apr 11, 2021 12:30PM ET
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Yet the black love to vote democratic decade after decade. They only hurt themselves. So sad the majority can’t see that.
Marco Loureiro Silva
Marco Loureiro Silva Apr 11, 2021 12:25PM ET
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The moral risk is none
iTrung Nguyen Duc
iTrung Nguyen Duc Apr 11, 2021 12:19PM ET
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gold will down right?
Eudon Hickey
Eudon Hickey Apr 11, 2021 11:57AM ET
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Did he actually say it, or did 60min edit this as well??
Domingo Depena
Domingo Depena Apr 11, 2021 11:51AM ET
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God has nothing to do with the decidiond of the masses people need to learn how to take this covid crap serious numbers are going back up
Olisa Solomon
Olisa Solomon Apr 11, 2021 11:46AM ET
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God save us
 
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