Fed's Powell won't change its easy monetary stance despite uptick of BER

The Fed will stimulate economy through low policy rate and hefty asset purchases. It is unlikely to withdraw policy support by raising rates or tapering its bond purchases in the near future. Fed emphasized for more fiscal assistance for the economy as monetary policy alone is not enough to bolster labor market to its lowest unemployment rate. 

U.S. economy shrank 3.5% last year, the worst contraction just after World War II. The unemployment recorded worst during pandemic. While Fed officials don't expect the unemployment rate to near its pre-pandemic level until 2023. 

The Fed took unconventional steps last March to cut its short term interest rate to near zero and launched an array of emergency lending programs and implemented large-scale purchases of Treasury securities and mortgage bonds $80 billion and $40 billion respectively. However, Jerome Powell put most importance on fiscal policy as essential tool in order to recover the damaged economy. 

The Fed won't hike its interest for temporary uptick of inflation. The central bank won't change its policies unless they see persistent inflation rate of over 2% for some time. The chairman of the Fed said providing too much support to an economy is more preferable than doing too little until unemployment damage recovers to the pre-pandemic level. 

이중책무(Dual Mandate)를 목표로 하고 있는 연준은 고용이 팬더믹 이전 수준까지 회복을 해야 작년에 이행되었던 비전통적인 통화정책에 조금씩 테이퍼를 가할 수 있을 것이라고 WSJ에서 보도하였다. 현재는 2% 평균 인플레이션 목표제보다는 고용 회복에 신경을 더 쓰는 모양이다. 연준은 그들이 구사하는 통화정책에 더하여 강력한 재정정책 (Policy Mix 혹은 Monetary Financing of Government)이 수반되어야 경제의 회복속도가 증가할 수 있다고 주장을 한다. 

Wall Street Journal

https://www.wsj.com/articles/feds-powell-signals-easy-money-policies-to-remain-in-place-for-a-while-11612983601