US Federal Reserve leave rates near zero

The path forward for the economy is extraordinarily uncertain: Powell

(Web Desk) The Federal Reserve left interest rates near zero and vowed to use all its tools to support the recovery from an economic downturn that Chair Jerome Powell called the most severe “in our lifetime.”

“The path forward for the economy is extraordinarily uncertain, and will depend in large part on our success in keeping the virus in check,” he told reporters in a virtual press conference Wednesday after the Fed left interest rates near zero. He sounded a dour tone about how long a road is ahead to get back to where the country was only months ago and noted that more fallout from the virus still lies ahead.

“Even if the reopening goes well -- and many, many people go back to work -- it is still going to take a fairly long time for parts of the economy that involve lots of people getting together in close proximity” to recover, he said. “Those people are going to need support.”

Powell said that not all sectors of the economy were weakening, citing the housing sector as one bright spot. But on balance it looks like the data “are pointing to a slowing in the pace of the recovery,” he said, though it was too soon to say how large -- or sustained -- this pause would last.