Federal Reserve Chairman Jerome Powell underscored his determination to return the US labor market to full strength, saying Wednesday the central bank won’t begin to tighten easy-money policies until it sees much more improvement.
The Fed will maintain ultralow interest rates and continue strong asset acquisitions until “substantial further progress has been made” toward its employment and inflation goals, Mr. Powell told the House Financial Services Committee in testimony identical to his opening statement on Tuesday at the Senate Banking Committee. He said those goals are “likely to take some time” to achieve.
He also recognized that the economic viewpoint has improved since a slowdown in late 2020. The effects have rippled across financial markets in recent days, pushing bond yields up and prices for assets that are sensitive to interest rates, such as technology stocks, down. Mr. Powell’s assurances Tuesday that Fed policy is on hold for the foreseeable future drove stocks to a partial rebound.