WASHINGTON —Federal Reserve Chairman Jerome H. Powell said the Fed has “crossed a lot of red lines that had not been crossed before” as the central banks have sought to use all their tools to their “fullest extent” in response to the coronavirus pandemic.
“We felt called to do what we could,” Powell said Friday during a webinar hosted by Princeton University.
Powell said the Fed had done everything it can, given “this is that situation in which you do that, and you figure it out afterward.”
As CUToday.info has reported, among the many unprecedented steps taken by the Fed have been near zero interest rates, the announcement its bond purchases would be unlimited, and other emergency lending programs and liquidity facilities. The “red lines” the Fed has approached have included the purchase of corporate bonds and debt from states and large cities.
With more than 40-million Americans having now filed for unemployment benefits since March, Powell said he and the Fed understand the “burdens” of job loss are falling on those least able to bear them, in lower-paid service work, exacerbating economic inequalities.
‘Tremendous Inequality’
“Those are the people being laid off, who have the least financial resources,” Powell said. “It’s falling on women to an extraordinary degree,” and “there’s tremendous inequality” in how the pandemic is affecting the population.
He also voiced concern that if a second round of virus infections hits America, it could lead to a more delayed economic rebound.
Of interest to credit unions, Powell said the Fed is not looking to cut interest rates into negative territory, as had occurred in other countries.