Federal Reserve Chairman Jerome Powell said Tuesday that inflation and employment remain well below the central bank’s goals, meaning the current monetary policy is likely to stay in place, with interest rates near zero.
Mr. Powell told the Senate Banking Committee that the economic outlook is still “highly uncertain,” despite recent concern about a rise in bond yields and fears of inflation.
“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,” Mr. Powell said.
The unemployment rate in January was 6.3%, down significantly from its high near 15% last April but still much higher than before the COVID-19 pandemic hit.
He said the pace of hiring has slowed in the past three months, and millions of people are still out of work as the U.S. works to get the pandemic under control.
“The path of the economy continues to depend significantly on the course of the virus and the measure undertaken to control the spread,” Mr. Powell said. “The economic recovery remains uneven and far from complete, and the path ahead is uncertain.”
Sen. Pat Toomey, Pennsylvania Republican, said the economy is much improved from last year, and there isn’t a need for the $1.9 trillion relief bill working its way through Congress.
“We are well past the point where our economy is collapsing,” Mr. Toomey said. “In fact, our economy is growing very powerfully. The last thing we need is a massive, multi-trillion-dollar universal spending bill. It all gets funded with government debt. … There’s also a real danger that we have overheating in places that lead to unwanted inflation. I think the data is increasingly pointing in that direction.”