Powell Says Economy Far From Fed's Employment, Inflation Goals

Federal Reserve Chair Jerome Powell testified before Congress Tuesday about the country's economic and monetary policy.

Powell's Testimony: Powell told members of Congress that the current state of the economy is a long way from the Fed's unemployment and inflation goals, a sign that Powell said does not equate to "substantial further progress" — the words the Fed is looking for in order to change its asset purchases of $120 billion per month.

While the economy is nowhere near these goals, the Fed will be transparent and notify the public well in advance, Powell said.

Powell took a strong stand on inflation and said the effects of the coronavirus pandemic have "left a significant imprint."

Related Link: Chances Of A 2021 Fed Interest Rate Hike Have Jumped 13.4% In One Month

The inflation rate remains well below the inflation target of 2%, and the Fed is aiming for a rate exceeding 2%, Powell said. 

With more streamlined vaccine distribution and more doses being administered each day, there could be much more normal economic conditions later this year, he said.

Yet new strains of the virus are weighing heavily on the economy, global markets and job creation, Powell said.