WASHINGTON—Federal Reserve Chairman Jerome Powell reiterated Monday that the U.S. economy’s recovery remains far from complete despite recent improvement and that the central bank plans to continue providing support.
“The recovery has progressed more quickly than generally expected and looks to be strengthening,” Mr. Powell said in testimony prepared for delivery Tuesday in a hearing before the House Financial Services Committee. “But the recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.”
The Fed has held its benchmark interest rate near zero since the effects of the Covid-19 pandemic slammed the U.S. economy a year ago. Most central bank officials don’t expect to raise the rate until 2024 at the earliest. The Fed also plans to continue purchasing at least $120 billion a month of Treasury debt and mortgage-backed securities until the economic recovery makes “substantial further progress.”
A major federal relief package passed last year requires the heads of the Fed and Treasury Department to testify before Congress every quarter on their efforts to support the U.S. economy during the pandemic. After Tuesday’s hearing in the House, Mr. Powell and Treasury Secretary Janet Yellen are set to appear Wednesday before the Senate Banking Committee.
The package, known as the Cares Act, provided the Treasury Department $454 billion with which to backstop extraordinary lending programs by the Fed. Mr. Powell said Monday that the facilities had helped unlock almost $2 trillion in credit to support businesses, cities and states.
