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| Jerome Powell Chairman of the Federal Reserve System of the United States. © AFP=News1 |
Federal Reserve Chairman Jerome Powell has reiterated his pledge to keep the currency wider and low interest rates until Americans return to work, although there may be pressures to increase inflation.
According to Reuters on the 4th (local time), Chairman Powell at the Wall Street Journal’s (WSJ) Summit video conference refuted investors’ doubts about whether the Fed will be able to keep its professed even if the Corona 19 pandemic passes and the economy spontaneously rises.
“There is good reason to see progress in reaching the Fed’s maximum employment and 2% inflation target if the vaccine is released and the government’s spending expansion policy is implemented.”
“But it will take a significant amount of time to reach the goal,” said Powell. “I expect that we will be patient even if the situation improves.”
“If economic activity resumes, there is a possibility that there will be some pressure to increase inflation due to the base effect.”
His remarks are intended to alleviate concerns that the Fed may cause problems due to the recent rise in Treasury Treasury yields.
“The rise in Treasury yields is noticeable, but it’s not a disorderly move,” said Powell. “If Treasury yields rise too much, the Fed may have to intervene more strongly in the market to lower it.” The policy tone is appropriate,” he stressed.
However, shortly after Powell’s remarks that inflation could be under upward pressure, anxiety among investors increased, and 10-year Treasury bond yield rose 7.1bp (1bp=0.01%p) to 1.541%.
As government bond yields rise, all three indexes of the New York Stock Market are also on a downtrend.