Fed Chairman Powell: We Won’t Run Out of Ammo
Fed Chairman Powell said the Fed would work aggressively to support the economy and would not run out of ammunition in doing so
Fed Chairman Jerome Powell said the U.S. central bank will continue its strong efforts to support the flow of credit to the economy as Americans strive to protect themselves from the Coronavirus outbreak.
“We will continue to do this aggressively and cordially, as before,” Powell said in an interview with NBC’s “Today”, adding, “with these credits at stake, we will not run out of ammunition.”
Over the past three weeks, the Fed has announced a series of stimulus measures of unprecedented magnitude and scope to address the negative effects of the Coronavirus outbreak on financial markets and the U.S. economy.
These incentives include intensive bond purchases, emergency facilities to support credit markets, cooperation with other central banks to ensure the supply of dollars to the whole world, and programs that provide direct credit to American businesses.
“We know that economic activity will probably decline markedly in the second quarter of the year,” Powell said, pointing out that people are voluntarily withdrawing from normal life to maintain their own health.
This could also mean the US is entering a recession, the Fed Chairman said but added that it would be a temporary situation.
“At some point, we’re going to get the spread of the virus under control, and that’s when the confidence is back,” Powell said, predicting there will be a good bounce back when the urgency about health is over.
The president of the US central bank made his first public appearance since March 15, when he made a press conference via teleconference on Sunday evening, in a rare move to announce that the central bank has lowered its policy interest rate to near zero, with a popular morning show on TV at a time when Americans are locked away from home due to the epidemic.
Fed presidents have been very careful in their 10 years of communication with the public, as their message creates serious signals for investors.
Ben Bernanke, who led the Fed during the financial crisis, gave one of his rare televised remarks to CBS’s “60 Minutes” program in March 2009. Former Fed Chairman Alan Greenspan, meanwhile, halted his interviews in 1987 on ABC’s “this week with David Brinkley” program after his assessments led to a drop in stocks.