Federal Reserve Chairman Jerome Powell pledged Thursday that the central bank will keep using the tools it has to fight the economic slowdown brought on by the coronavirus crisis.
In an interview with NBC’s “Today” show, the central bank chief said the recent initiatives the Fed has taken will help provide capital to businesses that need it and will be especially helpful once the virus is brought under control.
“When it comes to this lending, we’re not going to run out of ammunition, that doesn’t happen,” Powell told NBC’s Savannah Guthrie. “We still have policy room in other dimensions to support the economy.”
Over the past two weeks, the Fed has taken its benchmark rate to near-zero and initiated a slew of measures aimed at keeping credit flowing. The Fed also has joined the Treasury Department in programs that will provide funding to businesses of all sizes, and is has begun buying corporate bonds and other assets where it has not been invovled previously in order to free up frozen credit markets.
Powell said the Fed is aiming at “places where credit is not being offered where it should be offered.”
“We can step in and market that happen. That’s a very positive thing and appropriate thing in this highly unusual situation we’re in,” he said.
In addition to the other steps, the Fed has relaunched its asset purchasing program, vowing to buy as many bonds as needed to keep markets and the economy functioning properly.
With the U.S. economy coming to a halt in an effort to stop the deadly virus from spreading, Powell emphasized that this is not a normal downturn brought on by a crisis in a particular part of the economy.
As President Donald Trump has pushed for a quick resumption of economic activity, Powell didn’t offer an opinion on when he thinks that would be appropriate.
“We’re not experts in pandemics over here. We don’t get to make that decision. I would say that we would tend to listen to the expects,” Powell said. “Dr. Fauci said the virus is going to set the timetable. That sounds right to me,” he added, referring to Anthony Fauci, the White House coronavirus task force member.
He said growth had been strong otherwise and he expects that to continue once the virus is brought under control.
“We’re trying to create a bridge from a very strong economy to another place of economic strength,” Powell said. “That’s what our lending does.”