Federal Reserve Chairman Jerome Powell said risks remained to the economic outlook
The Federal Reserve said Wednesday that the economy is moving forward thanks to the ongoing vaccine rollout.
The line continued on toe that inflation was almost temporary, and the Fed was also bringing its interest rate close to zero.
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The US Central Bank said despite positive data on employment and the strength of the economy, risks remain to the economic outlook.
Hinesh Patel, portfolio manager at Quilter Investors, believes that if inflation continues to rise, the Fed must act sooner or later.
“Jerome Powell and I think it seems like they’re happy to wait until the data is clearer, like where the economy is heading, and yet still, for a while, they’re in hand for a while. I’ll keep sitting,” Patel said.
“Unfortunately, there is little that can be done for them now. The effects of this pandemic and the recovery that followed have been felt very differently by different groups in the population. So far, it’s a two-speed recovery. , Low-income workers continue to be affected negatively. With many still relying on government support and not yet seeking jobs or employment, Powell has been spending to support the wider economy. Keep the tap.”
According to Patel, there will be a time when the market will need to confirm a clearer plan for reducing quantitative easing.
“Inflation is a beast that could quickly become out of control, and whether the Fed must take more severe actions than it did if the volatility had been done before.”
“The US probably doesn’t need to mitigate at the current level as recovery is on track and vaccinations continue to be a priority. Powell clearly doesn’t want to be too early or fail. Further communication of which conditions will be cuts could be a way to place markets that are worried about price increases going out of control,” Patel added.
