Friday, March 5, 2021
No Result
View All Result
News Dome
Advertisement
  • Home
  • Breaking news
  • Business & Economy news
  • Stock markets latest
  • Politics
  • Tech & Automotive industry
  • Mining industry
  • Sports
  • Entertainment
  • Lifestyles
    • Health and Fitness
    • Travel & outdoor adventures
  • Mental health awareness
  • Motivation & Inspiration
  • Relationships, Dating & Parenting
  • Shop
    • Products
    • Apps
  • Home
  • Breaking news
  • Business & Economy news
  • Stock markets latest
  • Politics
  • Tech & Automotive industry
  • Mining industry
  • Sports
  • Entertainment
  • Lifestyles
    • Health and Fitness
    • Travel & outdoor adventures
  • Mental health awareness
  • Motivation & Inspiration
  • Relationships, Dating & Parenting
  • Shop
    • Products
    • Apps
No Result
View All Result
News Dome
No Result
View All Result
Home Business & Economy news

Powell Signals Fed to Keep Buying Bonds Even as Outlook Improves

in Business & Economy news
3 min read
0
Powell Signals Fed to Keep Buying Bonds Even as Outlook Improves
Share on FacebookShare on Twitter


(Bloomberg) — Federal Reserve Chairman Jerome Powell signaled that the central bank was nowhere close to pulling back on its support for the pandemic-damaged U.S. economy even as he voiced expectations for a return to more normal, improved activity later this year.

“The economy is a long way from our employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved,” he said in the text of testimony to be delivered Tuesday to the Senate Banking Committee.

The Fed is currently buying $120 billion of assets per month — $80 billion of Treasury securities and $40 billion of mortgage-backed debt — and has pledged to keep up that pace “until substantial further progress” has been made toward its goals of maximum employment and 2% inflation.

Powell’s testimony occurred against the backdrop of growing optimism about the economy as vaccines against the coronavirus are more widely disseminated and expectations of further fiscal stimulus from President Joe Biden and Congress mount.

Inflation Expectations

Bond yields have risen on the economy’s better prospects and in anticipation of faster inflation. Some traders have also brought forward their expectations for the Fed’s first interest rate increase since it slashed rates effectively to zero last year.

Price action was volatile in the aftermath of Powell’s opening statement text release, with 10-year yields initially rising a couple of basis points to 1.3875% session highs, before the move quickly faded and yields dropped back lower by about the same amount.

Interest-rate swap markets are pricing the first 25 basis point of Fed hikes around mid-2023, versus the early-2024 timeframe priced in at the beginning of this month.

Read More: Traders See Earlier Fed Hikes, Even as Goldman Cautions on Pace

“While we should not underestimate the challenges we currently face, developments point to an improved outlook for later this year,” Powell said. “In particular, ongoing progress in vaccinations should help speed the return to normal activities.”

The economy started 2021 on a strong note, as retail sales and factory output accelerated. In the wake of the firmer data, Bloomberg Economics last week boosted its 2021 growth forecast to 4.6% from 3.5% and said that could rise toward 6%-7% if Biden’s $1.9 trillion aid package is enacted.

The jobs market though has softened, with claims filed for unemployment benefits jumping to a four-week high in the most recent reporting period. Payrolls last month barely rose, by 49,000, after a 227,000 decline in December, and while unemployment dropped to 6.3%, that partly reflected more people leaving the workforce.

“The high level of joblessness has been especially severe for lower-wage workers and for African Americans, Hispanics, and other minority groups,” Powell said. “The economic dislocation has upended many lives and created great uncertainty about the future.”

He reiterated the Fed’s pledge to keep short-term interest rates pinned near zero until the labor market has reached maximum employment and inflation has risen to 2% — and is on track to moderately exceed that level for some time.

The personal consumption expenditures price index rose 1.3% in December 2020 from a year earlier, well below the Fed’s 2% inflation target. After stripping out volatile food and energy costs, core inflation clocked in at 1.5%

“The economic recovery remains uneven and far from complete, and the path ahead is highly uncertain,” Powell said.

(Updates with details throughout.)

For more articles like this, please visit us at bloomberg.com

Subscribe now to stay ahead with the most trusted business news source.

©2021 Bloomberg L.P.



Source link

Previous Post

Meghan McCain Says Dr. Fauci Should Be Fired And Replaced By Someone Who ‘Understands Science’

Next Post

Tens of Thousands of Virus Species Live in Your Gut

Next Post
Tens of Thousands of Virus Species Live in Your Gut

Tens of Thousands of Virus Species Live in Your Gut

Discussion about this post

Recent News

Celebrating The Trailblazing Black Women Shaping U.S. History In Real Time

Celebrating The Trailblazing Black Women Shaping U.S. History In Real Time

March 5, 2021
They Spent 24 Years Behind Bars. Then the Case Fell Apart.

They Spent 24 Years Behind Bars. Then the Case Fell Apart.

March 5, 2021
Rethinking risk – Moneyweb

Rethinking risk – Moneyweb

March 5, 2021
‘Illegal’ event at Cape Town school shut down, organiser fined for breaking lockdown rules

‘Illegal’ event at Cape Town school shut down, organiser fined for breaking lockdown rules

March 5, 2021
World’s oldest known wild bird has another chick at age of 70

World’s oldest known wild bird has another chick at age of 70

March 5, 2021
Fed Officials Play Down Higher Yields, Need for Policy Response By Bloomberg

Fed Officials Play Down Higher Yields, Need for Policy Response By Bloomberg

March 5, 2021
Manchin’s antics threaten to blow up COVID-19 relief bill, take unemployment away from millions

Manchin’s antics threaten to blow up COVID-19 relief bill, take unemployment away from millions

March 5, 2021
When is the NBA All-Star Game and how do you watch it?

When is the NBA All-Star Game and how do you watch it?

March 5, 2021
Decorated sergeant ‘killed in live fire Welsh Guards training exercise’ 

Decorated sergeant ‘killed in live fire Welsh Guards training exercise’ 

March 5, 2021
News Dome

All the latest breaking news on News Dome. Browse The Independent's complete collection of articles and commentary on News Dome.

Follow Us

Browse by Category

  • Apps
  • Breaking news
  • Business & Economy news
  • Entertainment
  • Health and Fitness
  • Lifestyles
  • Mental health awareness
  • Mining industry
  • Motivation & Inspiration
  • Politics
  • Products
  • Relationships, Dating & Parenting
  • Sports
  • Stock markets latest
  • Tech & Automotive industry
  • Travel & outdoor adventures

Recent News

Celebrating The Trailblazing Black Women Shaping U.S. History In Real Time

Celebrating The Trailblazing Black Women Shaping U.S. History In Real Time

March 5, 2021
They Spent 24 Years Behind Bars. Then the Case Fell Apart.

They Spent 24 Years Behind Bars. Then the Case Fell Apart.

March 5, 2021
  • Home
  • Terms & Conditions
  • Privacy Policy
  • Contact us

© 2020 - Cutting Edge News Magazine - News Dome.

No Result
View All Result
  • Home
  • Breaking news
  • Business & Economy news
  • Stock markets latest
  • Politics
  • Tech & Automotive industry
  • Mining industry
  • Sports
  • Entertainment
  • Lifestyles
    • Health and Fitness
    • Travel & outdoor adventures
  • Mental health awareness
  • Motivation & Inspiration
  • Relationships, Dating & Parenting
  • Shop
    • Products
    • Apps

© 2020 - Cutting Edge News Magazine - News Dome.