FOMC Press Conference, April 28, 2021 | Summary and Q&A

TL;DR

Fed Chair Powell maintains that the central bank will continue to provide support to the economy through accommodative monetary policy until substantial further progress is achieved in terms of employment and inflation goals.

Key Insights

• 😘 The Fed is cautiously optimistic about the economic recovery but acknowledges that significant challenges remain, especially for marginalized communities and low-wage workers.
• 😒 The central bank is closely monitoring inflation expectations and is prepared to use its tools to guide inflation back to its 2% target if needed.
• 😮 The housing market is strong but not in bubble territory, with the rise in prices driven by supply-demand imbalances rather than unsustainable lending practices.
• 🏦 The Fed's asset purchases and monetary policy measures are aimed at providing support to the economy until substantial further progress is made towards the central bank's goals.
• ⚾ Monetary policy decisions will be based on data and economic conditions, with a focus on achieving maximum employment and price stability.

Transcript

April 28, 2021 Chair Powell's Press Conference FINAL Page 1 of 29 Transcript of Chair Powell's Press Conference April 28, 2021 CHAIR POWELL. Good afternoon. At the Federal Reserve, we are strongly committed to achieving the monetary policy goals that Congress has given us: maximum employment and price stability. Today my colleagues on the FOMC and ... Read More

Questions & Answers

Q: When will the Fed begin to taper asset purchases?

The Fed will taper asset purchases when substantial further progress is made towards the goals of maximum employment and price stability. The timing will be determined by data and economic conditions.

Q: Are there concerns about housing market bubbles?

While housing prices have risen, they are not seen as bubbles. The market is driven by strong demand and limited supply, but there are no signs of unsustainable lending practices or significant financial stability risks.

Q: How does the Fed plan to address the issue of long-term scarring in the economy?

The Fed is focused on supporting maximum employment and is working to ensure that workers and businesses can recover from the economic dislocation caused by the pandemic. The labor market and the economy will need time to fully recover.

Summary & Key Takeaways

• The Federal Reserve remains committed to achieving maximum employment and price stability, and will maintain current interest rates and asset purchases to support the economy until the recovery is complete.

• The recovery of the economy has been quicker than expected, but it remains uneven and dependent on virus control measures.

• Employment gains have been made, but the labor market still faces challenges, particularly for low-wage workers and marginalized communities.

• Inflation is expected to rise due to temporary factors like base effects and supply bottlenecks, but the Fed will use its tools to ensure inflation remains consistent with its 2% target.