“The unemployment rate will be close to 10%…the correlation between low interest rates and rising asset prices is low”
Jerome Powell, chairman of the Federal Reserve (Fed), warned of optimism that the economy hit by the novel coronavirus infection (Corona 19) would soon recover.
Chairman Powell said in a press conference after the Federal Open Market Committee (FOMC) decided to maintain zero interest rates on the 27th (local time), “Corona 19 still presents a significant risk to the economy.
He pointed out, “It is very uncertain, and there are still difficult times.”
He explained that the unemployment problem caused by the Corona 19 incident is particularly serious.
Last month, the unemployment rate announced by the US Department of Labor was 6.7%, but it is actually close to 10%.
“It is important to get the unemployed to get their jobs back as soon as possible,” said Powell.
“There’s nothing more important to the economy than the current vaccination,” said Powell, who recently revealed that he had been vaccinated.
In addition, Chairman Powell said it is unlikely that inflation, which could burden the economy, will occur anytime soon.
He then reaffirmed its position that the Fed will not raise interest rates for a while, saying that the Fed will be patient with the temporary and modest inflation.
“It’s more important to worry about the situation when the economy is not fully recovering than the possibility of inflation,” he pointed out.
In particular, he dismissed the criticism that the stock market had bubbled due to low interest rates, saying, “The rise in asset prices is due to anticipation for vaccines and stimulus measures.”
“The correlation between low interest rates and rising asset prices is not as close as people think,” he said.
Chairman Powell added that it was premature to mention the timing of the Fed’s reduction in asset purchases.
/yunhap news
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