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Powell Flags 'Unevenness' in Recovery, Backs Fed's Bond Buying Plans

EconomyApr 08, 2021 12:55PM ET
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© Reuters.

By Yasin Ebrahim

Investing.com - Federal Reserve Chairman Jerome Powell said Thursday the economy has avoided the worst case scenario, but he continued to back the current pace of the Fed's bond purchases, citing "unevenness" in the recovery.  

The Fed chief, appearing during a virtual IMF panel discussion on Thursday, didn't sway from the central bank's ongoing narrative that asset purchases will continue until substantial progress is made toward achieving the central bank's employment and inflation goals.

The better-than-expected March jobs report, released last week, caught Powell's attention, but he was quick downplay any meaningful recovery in the labor market as unemployment remains above pre-pandemic levels.  

"There is a brighter outlook for the U.S. economy from fiscal support and vaccines, but unevenness in the recovery is a serious issue," Powell said during the discussion. "We want to see a string of months like the March jobs report to see progress."  

Powell also reiterated the Fed's view that the widely expected boom in inflation from ongoing supply chain bottlenecks and the reopening of the economy would be temporary. 

"[T]here would be upward pressure on prices [from supply chain bottlenecks] that may be passed onto the consumer ... but we think that the effect would be temporary," Powell said. The rising costs that consumers will likely have to bear will "not be repeated as the supply chain will adopt and become more efficient," he added.  

The Fed, however, would be prepared to raise interest rates if inflation were to unexpectedly move materially and persistently above its 2% target, but the central bank doesn't think that is the most likely outcome.          

The Fed chief's dovish comments echoed the tone of the Fed's March monetary policy meeting minutes released Wednesday. Fed policymakers acknowledged progress on the economy, but continued to back the ongoing pace of monetary support, saying substantial progress on the recovery will likely take "some time."

 

Powell Flags 'Unevenness' in Recovery, Backs Fed's Bond Buying Plans
 

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Comments (26)
d5hin1990 .
d5hin1990 . Apr 09, 2021 12:52PM ET
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Sp500 adds 100 point a week we will be at 4500 end of month. Sp500 way under value should be at 4500-4600 a long time ago. Fyi no one cares about inflation
Ronald Warren
Ronald Warren Apr 09, 2021 9:40AM ET
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Am I the only one who noticed that Powell said he's ready to raise interest rates if inflation runs over 2%.The market should be reflecting that statement. This morning the PPI is over 4% YOY. HELLO!!
Douglas Whatley
Douglas Whatley Apr 09, 2021 8:29AM ET
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clear as mud
perplexed76 .
perplexed76 . Apr 08, 2021 10:54PM ET
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he's bond, jerome bond
Douglas Whatley
Douglas Whatley Apr 08, 2021 10:54PM ET
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nice one
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 10:54PM ET
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Ur quote pushed the dollar up
Adam Paine
Adam Paine Apr 08, 2021 9:10PM ET
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it's incredible that no one is concerned about the massive outbreaks in India, Canada and South America. This could easily derail our plans for recovery this summer. Also, the chip shortage is real and getting worse. this realities simply can't be "shrugged off" The efficacy of the vaccine against variants is a huge unknown. We will see folks... but this could certainly get much worse before it gets better.
Shane Weddle
Shane Weddle Apr 08, 2021 9:10PM ET
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Only gets worse if we let it. Sooner or laer himanity is going to have to accept that theres some things you cant control. Sooner or later choosing to live the only life we get has to outweight the risks. Otherwise, we destroy ourselves far more than the virus. Modern civilization is incredibly fragile wheather we want to admit it or not.
Adam Paine
Adam Paine Apr 08, 2021 9:10PM ET
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We are letting it get worse. Humanity usually let's issues get worse i.e. pollution, inequality, racism. All blind folded by the almighty dollar. So many people dropping their guard on Covid at such a crucial point.. Sad.
Dave Jones
Dave Jones Apr 08, 2021 9:10PM ET
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you need to go along with the narrative....everything is awesome with biden
Martino Razz
Martino Razz Apr 08, 2021 9:10PM ET
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Dave Jones  lol, exactly, biden is the most popular president there ever was
Deanna Reiniger
Deanna Reiniger Apr 08, 2021 9:10PM ET
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I agree, these concerns are very serious to consider, but there is new data that you might be interested in reading about regarding the efficiency of the vaccines on these new coronavirus variants. There is still more research that needs to make stronger conclusions, but with Pfizer there has been some evidence that the vaccine is very effective against the South African variant.
Mike Chen
Mike Chen Apr 08, 2021 8:05PM ET
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Powell enjoys the power of printing money and leaves his name as the historic American hero with unlimited QE inventor! Thanks for the inflation storm!
sandeep sharma
sandeep sharma Apr 08, 2021 8:05PM ET
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powell making bubble of financial crises sooner or later ballon will be blast.
Adam Paine
Adam Paine Apr 08, 2021 8:05PM ET
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Socialism honey-glazed with Democracy
Joel Schwartz
Joel Schwartz Apr 08, 2021 7:06PM ET
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Economy so “strong” the IMF calls for global growth not seen in forty years. Economy also so “weak” the FED can’t raise interest rates until 2023. Gotcha.
jamal jamal
jamal jamal Apr 08, 2021 7:06PM ET
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LOL who was right again. Buy the dip. Fake market always goes up. Why fight it? Just bank from the scam.
Steve Bucher
Steve Bucher Apr 08, 2021 6:30PM ET
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Clear as mud.
No No
No No Apr 08, 2021 6:17PM ET
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Look at this criminal
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 4:37PM ET
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Powell should visit Elon Musk. Why does government not cooperate with geniuses?!!!
CHAD TENDIES
CHAD TENDIES Apr 08, 2021 4:34PM ET
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This article is full of typos
Mostafa Ajjouj
Mostafa Ajjouj Apr 08, 2021 3:50PM ET
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MONEY ME  OKY
Anony Mous
Anony Mous Apr 08, 2021 3:43PM ET
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This Fed tampering with the markets will not end well. The sugar coating will melt away soon.
MK MK
MK MK Apr 08, 2021 3:38PM ET
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USD must be destroyed as world currency. Only then we will see true strength of US "economy". Whole world is sick of those bustards yankies
Dave Jones
Dave Jones Apr 08, 2021 3:16PM ET
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you can't taper a ponzi
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 3:16PM ET
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Could you explain more pls.I’m confused!To whom does the Fed owe debt?!Everything is rising higher, but the dollar is joking!
Dave Jones
Dave Jones Apr 08, 2021 3:16PM ET
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easy. to pay off the debt they have to increase the debt. ponzi. never ending debt spiral
Gold Fever
Gold Fever Apr 08, 2021 3:16PM ET
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Like borrowing from Peter to pay Peter, *******with Paul
Arthur Thompson
Arthur Thompson Apr 08, 2021 2:35PM ET
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There is a lot more needed to be added CPI and if it was unchanged from the calculations of the 1980's you would see much higher reading on the CPI. In 2006 they cancelled the M3 money report, now it's the M1, soon there won't be any reports. Trust them when they say they will take care of us all. and there is nothing to see here. I suspect they may be involved in the biggest scam in history. They say there is no inflation, but everything is rising faster than you can come up with the cash to pay for it. One gage I watch are the taxes for municipal to federal, when they go up there is definitely inflation. They always spend more than they earn.
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 2:21PM ET
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An experience, 2 years ago this money burning happened in Iran’s stock exchange.People sentimental acts made growth at first and all people from every class rushed to invest, but after 6 months the index lost more than 70% of its values. Most of the profits and late investments burned. ( money will return to who made it )
Reza Mozaffari
Reza Mozaffari Apr 08, 2021 2:21PM ET
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Iran dollar tolid nmikone amrica ham babate bedhii b kasii javab pas nmidee vli iran midde !!!amrica ba 4 ta dokmee mitone bedehisho sefr kone sale mali jadido ba sefr shoro kone va chape pool zarbeii b eqtesad amrica nmizane tahesh mire y jaii jang doros mikone aslhe mifroshee ounaii k aslhe mikhan bkharan dollar mikhaan !!!
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 2:21PM ET
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Reza Mozaffari salam. Nazaretun rajebe arzeshe dollar jahani chie?Man tajrobeyio goftam ke in ruzhaye amrica shabihesh shode, 2 sal pishe iran ke mardomo hol dadan tu bourse va pula gheib shod!
Testing Man
Testing Man Apr 08, 2021 1:31PM ET
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cost of housing should be included in inflation metric, then we will notice that inflation is much higher than what's being told outside. Fed behaves as though screwing one metric will fundamentally change economy. All they are doing is postponing today's problem to an even bigger problem tomorrow
Samantha Sa
Samantha Sa Apr 08, 2021 1:26PM ET
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The thing of it is, there is no going back to pre-pandemic levels. If not for the novel virus, the emerging retail apocalypse and job replacement with automation would have become more apparent. These issues that were headed in the direction of eventual critical mass have been made obscured in COVID based monetary policies.
Nick Burns
Nick Burns Apr 08, 2021 1:26PM ET
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hmm I thought they made them even more obvious and attractive to companies that need to automate as much and save on labor cost
Samantha Sa
Samantha Sa Apr 08, 2021 1:26PM ET
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Nick Burns Yes. Put another way, COVID accelerated the trend toward automation.
Fozzy Ferdinand
Fozzinand Apr 08, 2021 1:26PM ET
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“Unemployment remains above prepandemic levels”? So until we’re back to the greatest economy we’ve had in decades the current plan continues? Lol! Disaster is looming.
Jeppe Pik
Jeppe Pik Apr 08, 2021 1:24PM ET
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If you want to get rich, then you will need to bye Bitcoin Miners.... The will beat Bitcoin time 2,5...!!! This advice is free, take it ☺️🤗👌
Steen Larsen
Steen Larsen Apr 08, 2021 1:24PM ET
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He is a professor, so you can trust him!
Jeppe Pik
Jeppe Pik Apr 08, 2021 1:24PM ET
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Not quite.... But VERY rich... 🤣
Steen Larsen
Steen Larsen Apr 08, 2021 1:24PM ET
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Jeppe Pik  And he has a nice Mercedes AMG convertible!
Mojo Snake
Mojo Snake Apr 08, 2021 1:23PM ET
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Jay Powell will be the single biggest factor as to why the epic crash occurred when it finally occurs..... History will show the 2000 Tech bubble, the 2007 Housing crisis, and the ???? Jay Powell Fake money bubble...... You will infamous for your failure Jay just like Enron and Lehman Brothers..........
Joel Schwartz
Joel Schwartz Apr 08, 2021 1:23PM ET
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Never forget that Cramer told people to buy Bear Stearns the day before it crashed from $62 -> $2 five days later. https://app.hedgeye.com/insights/70141-remember-this-jim-cramer-bear-stearns-is-fine-do-not-take-your-mon
Roger Miller
Roger Miller Apr 08, 2021 1:21PM ET
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Someone has to buy the hoards of new US government debt to keep interest rates manageable for the US gov and low for the top 1%; who better than the US government.
Nick Burns
Nick Burns Apr 08, 2021 1:21PM ET
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from what I understand of the "new way" of thinking is as long as they can get gdp back over inflation we can run debt this way forever. the whole buying our debt and all is just shell games governments play...
Peter ONeill
Peter ONeill Apr 08, 2021 1:21PM ET
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Nick Burns  That was the same thinking of Japan in the 1980s. Now their debt servicing is costing so much that their economy went into stagnation which has lasted almost 30 years with GDP growth rarely above 2%. The ONLY reason US treasury yields are not skyrocketing already is as the US Dollar is the globe's reserve currency and safe haven. If it ever loses that ...
Billy Foos
Billy Foos Apr 08, 2021 1:16PM ET
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In otherwords they are printing money for the rich with markets at all time highs... Then our government will raise taxes on the middle class..
Jimmy Kim
Jimmy Kim Apr 08, 2021 1:16PM ET
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True. This is everything. Market soars for richers, tax rises for middle classes.
Testing Man
Testing Man Apr 08, 2021 1:16PM ET
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rich becoming richer, middle class and poor becoming poorer. good strategy by jerome
Nick Burns
Nick Burns Apr 08, 2021 1:16PM ET
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just think it's worked before so why change
Mehdi Captain Music
Mehdi Captain Music Apr 08, 2021 1:16PM ET
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You are all new with this stuff. I’m an Iranian, in here these things are funny for us. Now your governors are copying 3rd generation country strategy.
American Truth
American Truth Apr 08, 2021 1:11PM ET
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apparently these elite globalists don't buy gasoline or groceries.
Catharine Varady
Catharine Varady Apr 08, 2021 1:11PM ET
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they keep saying the same thing, more of propaganda than real economy action for me. later we don't care the fed print undefinite dollar and keep valuing it
 
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