Fed Chairman Jerome Powell predicts the US economy will be BOOM this year, growth could reach 7% or higher
The chairman of the Federal Reserve says the US economy will boom this year, with growth that may exceed previous forecasts and may exceed 7 percent.
That would be lightning-fast growth, especially compared to the 2020 growth rate – which was no growth at all: the economy retreated 3.5 percent amid the coronavirus pandemic.
Jerome Powell told it 60 minutes The post-pandemic economic recovery is driving faster-than-expected growth as the made-up Americans return to restaurants and shops with enthusiasm.
“The outlook has improved significantly,” Powell said.
He cited the success of the vaccination program, with 35 percent of the US population now receiving at least one dose, and strong fiscal and monetary policy support as the most important factors.
Powell said the main risk to the economic resurgence would be a resurgence of the COVID-19 pandemic and further lockdowns.
He also recognized that happiness was not evenly distributed.
As the stock market continues its record-breaking run and home prices are up 11 percent in the year to January, many Americans who don’t own assets are facing economic obscurity.
Federal Reserve Chairman Jerome Powell Says US Economy Will Grow 7% This Year And May Go Even Higher
On the New York Stock Exchange, traders have seen markets hit record highs as a stream of cheap money continued to fuel stock prices
Homeless people living in tents, this month above in Miami, Florida, are common in cities across America. Jerome Powell told 60 Minutes that a broad economic recovery was gaining speed, but not everyone enjoyed the boom
Speaking with 60 Minutes host Scott Pelley on Sunday night’s schedule, Powell painted a particularly rosy outlook for the remainder of 2021 and beyond.
Powell abandoned the usual cautious language used by the person who controls the country’s pursuits and now described the economy as at a “tipping point.”
“We feel like we are in a place where the economy is about to grow much faster and jobs are being created much faster,” he told 60 Minutes.
So the main risk to our economy now is really that the disease would spread again. It becomes smart if people can continue to distance themselves socially and wear masks. ‘
He said people returned with confidence to eat out and shop, and private sector forecasters saw strong job creation.
In March, the Federal Open Market Committee, the central bank’s monetary policy group, said it expected 6.5% growth in the US this year, significantly higher than the 4.2% it forecast in December.
Now Powell predicts that figure could go above 7%, but hasn’t given it an exact figure.
This would be the highest GDP growth in more than 30 years, he said.
GDP rose steadily in the US during the Trump presidency – until the COVID-19 shock in 2020. It recovered quickly and is set to grow more than 7% this year.
The economic recovery has been highly regionalized: states like Texas and South Dakota that oppose some lockdown measures have done better
A nurse delivers a single dose dose of the Johnson & Johnson vaccine to one of 2,000 Germantown residents on Friday during a massive vaccination event in Philadelphia. Powell called the success of the vaccine program a key driver of economic recovery
Government spending on stimulus and unemployment has helped accelerate the resurgence
President Joe Biden’s $ 1.9 trillion Cares Act was a key factor in aiding economic recovery, Powell said
Powell described the $ 1.9 trillion Cares Act, which expanded unemployment coverage and provided $ 1,400 incentive checks to every American, as “ heroic. ”
He said the payments had “kept people at home, kept them solvent, kept their lives together.”
Powell said he would not forget the people who were “truly left without work on the beach as this expansion continues.”
He was asked what he thought about people living in tents just a mile from where the interview was held in the heart of Washington DC.
“Well, it tells me we don’t have an answer for everything,” he replied.
‘But we, the work we do for the benefit of the public, is incredibly important. And we understand that if we do it right, we can really help people. If the people on the margins of the economy are doing well, the rest will take care of themselves. ‘
The U.S. economy shrank 3.5% in 2020, the worst year for growth since 1946, when the coronavirus pandemic caused chaos in the global financial system.
Unemployment reached a staggering 14.7% in the US in April when the country came to a standstill.
Powell said that figure was now down to about 6%, and with the economy booming, it could drop as much as 4%.
Stocks have set record after record, with all three major benchmarks, the Dow Jones, the S & P500 and the Nasdaq, nearly hitting their all-time highs on Friday.
The Dow Jones Industrial Average closed at 33,800.6 on Friday.
He says the risk of reverting to a 2008-style economic crisis was low. The greatest risk nowadays is caused by cyber threats.
‘We spend so much time and money protecting against these things.
There are now cyber attacks on all major institutions every day. That’s a big part of the threat picture in today’s world.
The Fed cut interest rates to near zero a year ago as the pandemic halted much of the economy and kept cheap credit going to support the economy and avoid a longer recession.
This, coupled with stimulus checks to every American of $ 600 last year and another $ 1,400 in March, as well as expansion of unemployment benefits and support for businesses and governments, is helping to boost consumer confidence and spending.
Powell said inflation was a concern, and he wanted it only moderately above 2%.
If it got above 2% over a period of time so that it averaged 2%, they would try to raise interest rates.
He said it was “highly unlikely” that they would hike interest rates this year, and others at the Federal Reserve think the odds of a hike in 2022 are slim.