Fed Chairman Powell continues congressional testimony today

US Politico 1
Photo: Politico

US Federal Reserve Chairman Jerome Powell is due in Washington D.C. today to testify before Congress on the Federal Reserve’s biannual monetary policy report.

Speaking to the Federal Open Market Committee on June 10, Powell reiterated that the Fed will continue pumping stimulus money into the economy and will not raise rates until 2022 in the hopes that the labour market will heal and a prolonged recession can be avoided.

Powell has been criticised for a negative outlook on a US economy currently in recession and facing 14% unemployment. The chairman has stated that the Central Bank will rely on a long-term, deliberate quantitative easing strategy that will attempt to minimise any further K-shaped economic inequality. Today, Powell will most likely stick to the points he made last week, insisting that the Fed will continue with interest rate reductions as well as government and corporate bond purchases to provide economic support for recovery.

With US public debt projected to blow past $25 trillion in the next year, structural economic inequalities have a limited timeframe to be fixed before institutions like the Fed no longer have the full toolkit to address them. By sticking to his testimony, it will be clear that the onus of an equitable and speedy recovery will be on Congress and the White House, and that the Federal Reserve will not shift their plans for political expediency.

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