A slow rollout of coronavirus vaccinations across the globe and rising case counts in the U.S. are risks to what appears to be a strong economic recovery, Fed Chairman Jerome Powell said April 8.
The U.S. is seeing a "brighter outlook" given its quick pace of vaccinations compared to other parts of the globe and the boost from fiscal stimulus, the Fed chief said at the International Monetary Fund's spring meetings. But the central bank is also tracking the pace of global vaccinations "very carefully" along with the recent rise in COVID-19 cases in the U.S., Powell added, urging the public to get vaccinated and continue following social distancing protocols.
"Until the world really is vaccinated, we're all going to be at risk of new mutations, and we won't be able to really resume activity with confidence all around the world," Powell said. "So it's not only the right thing to do. It's also the smart thing to do."
Powell said the U.S. got a "taste of what faster progress will look like" with the March jobs report, which beat expectations and showed that the country added 916,000 jobs last month.
"We want to see a string of months like that so we can really begin to show progress toward our goals," Powell said.
The recovery "remains uneven and incomplete," with millions of Americans still out of work and lower-income Americans being hit hardest, Powell said. He also noted there is a "substantial tent city" that he passes on his drive home from the Fed.
"We just need to keep reminding ourselves that even though some parts of the economy are doing great, there's a very large group of people who are not," Powell said.
Fed officials have said they will keep their benchmark interest rate at effectively 0% until they achieve their dual mandate of maximum employment and stable prices. Their most recent quarterly forecasts indicated they do not expect to raise interest rates until 2024 at the earliest, though some investors believe a rate hike will come sooner.
Markets have also been anticipating that the Fed may begin to reduce its $120 billion in monthly bond purchases sometime this year. Powell has avoided sharing a possible timeline for tapering to begin, noting Fed officials' guidance that they want to see "substantial further progress" in their goals before beginning to discuss lowering bond purchases.
Minutes of the Federal Open Market Committee's March 16-17 meeting showed officials believe it will take "some time" for the economy to reach those thresholds.