ウィスパリング同時通訳研究会コミュのFRB

Jerome Powell: (06:10)
Good afternoon. At the Federal Reserve, we are strongly committed to achieving the monetary policy goals that Congress has given us, maximum employment and price stability. Since the beginning of the pandemic, we have taken forceful actions to provide relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy. Today, my colleagues on the Federal Open Market Committee and I reaffirmed our commitment to support the economy in this challenging time.

Jerome Powell: (06:41)
Economic activity has continued to recover from its depressed second quarter level. The reopening of the economy led to a rapid rebound in activity, and real GDP rose at an annual rate of 33% in the third quarter. In recent months, however, the pace of improvement has moderated. Household spending on goods, especially durable goods, has been strong and has moved above its pre-pandemic level. In contrast, spending on services remains low, largely due to ongoing weakness in sectors that typically require people to gather closely, including travel and hospitality.

Jerome Powell: (07:22)
The overall rebound in household spending owes in part to federal stimulus payments and expanded unemployment benefits, which provided essential support to many families and individuals. The housing sector has fully recovered from the downturn, supported in part by low mortgage interest rates. Business investment has also picked up. Even so, overall economic activity remains well below its level before the pandemic, and the path ahead remains highly uncertain.

Jerome Powell: (07:54)
In the labor market, roughly half of the 22 million jobs that were lost in March and April have been regained, as many people were able to return to work. As with overall economic activity, the pace of improvement in the labor market has moderated. The unemployment rate declined over the past five months, but remained elevated at 7.9% as of September.

Jerome Powell: (08:17)
Although we welcome this progress, we will not lose sight of the millions of Americans who remain out of work. The economic downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been hardest hit. In particular, the high level of joblessness has been especially severe for lower wage workers in the services sector, for women, and for African Americans and Hispanics. The economic dislocation has upended many lives and created great uncertainty about the future.

Jerome Powell: (08:51)
The pandemic has also left a significant imprint on inflation. Following large declines in the spring, consumer prices picked up over the summer, in part reflecting a rise in durable goods prices. However, for those sectors that have been most effected by the pandemic, prices remain particularly soft. Overall, on a 12-month basis, inflation remains below our 2% longer run objective.

Jerome Powell: (09:16)
As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend in large part on the success of efforts to keep the virus in check. The recent rise in new COVID-19 cases, both here in the United States and abroad, is particularly concerning. All of us have a role to play in our nation’s response to the pandemic. Following the advice of public health professionals to keep appropriate social distances and to wear masks in public will help get the economy back to full strength. A full economic recovery is unlikely until people are confident that it’s safe to re-engage in a broad range of activities. The Federal Reserve’s response to this crisis has been guided by our mandate to promote maximum employment and stable prices for the American people, along with our responsibilities to promote the stability of the financial system. As noted in our statement on longer run goals in monetary policy strategy, we view maximum employment as a broad-based and inclusive goal. Our ability to achieve maximum employment in the years ahead depends importantly on having longer-term inflation expectations well anchored at 2%.

Jerome Powell: (10:33)
As we said in September and again today, with inflation running persistently below 2%, we will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer-term inflation expectations remain well-anchored at 2%. We expect to maintain an accommodative stance of monetary policy until these employment and inflation outcomes are achieved. With regard to interest rates, we continue to expect that it will be appropriate to maintain the current zero to one quarter percent target range for the federal funds rate until labor market conditions have reached levels consistent with the committee’s assessments of maximum employment and inflation has risen to 2% and is on track to moderately exceed 2% for some time.

Jerome Powell: (11:22)
In addition, over coming months, we will continue to increase our holdings of treasury securities and agency mortgage-backed securities at least at the current pace. These asset purchases are intended to sustain smooth market functioning and help foster accommodated financial conditions, thereby supporting the flow of credit to households and businesses. At this meeting, my colleagues and I discussed our asset purchases and the role they are playing in supporting the recovery. At the current pace, our holdings of securities are rising at a substantial rate of $120 billion per month, $80 billion per month of treasuries and $40 billion per month of agency MBS.

Jerome Powell: (12:04)
We believe these purchases, along with the very large purchases made to preserve financial stability in the depths of the crisis, have materially eased financial conditions and are providing substantial support to the economy. Looking ahead, we will continue to monitor developments and assess how our ongoing asset purchases can best support our maximum employment and price stability objectives, as well as market functioning and financial stability. The Federal Reserve has also been taking broad and forceful actions to more directly support the flow of credit in the economy for households, for businesses large and small, and for state and local governments. Preserving the flow of credit is essential for mitigating damage to the economy and promoting a robust recovery. Many of our programs rely on emergency lending powers that require the support of the Treasury Department and are available only in very unusual circumstances, such as those we find ourselves in today. These programs serve as a backstop to key credit markets and have helped to restore the flow of credit from private lenders through normal channels.

Jerome Powell: (13:13)
We have deployed these lending powers to an unprecedented extent, enabled in large part by financial backing and support from Congress and the Treasury. When the time comes, after the crisis has passed, we will put these emergency tools back in the toolbox. As I’ve emphasized before, these are lending powers, not spending powers. The fed cannot grant money to particular beneficiaries. We can only create programs or facilities with broad-based eligibility to make loans to solvent entities, with the expectation that the loans will be repaid. Many borrowers are benefiting from these programs, as is the overall economy. But for many others, getting a loan that may be difficult to repay may not be the answer. In these cases, direct fiscal support may be needed. Elected officials have the power to tax and spend and to make decisions about where we as a society should direct our collective resources.

Jerome Powell: (14:10)
The fiscal policy actions that have been taken thus far have made a critical difference to families, businesses, and communities across the country. Even so, the current economic downturn is the most severe in our lifetimes. It will take a while to get back to the levels of economic activity and employment that prevailed at the beginning of this year, and it may take continued support from both monetary and fiscal policy to achieve that.

Jerome Powell: (14:37)
I’d like to mention a couple of changes that we plan on making to our summary of economic projections beginning in December. First, we will release the entire package of SEP materials at the same time that the FOMC statement comes out. Previously, some of these materials were released three weeks after the meeting as part of the minutes. This step will make more information available at the time of our policy announcements, including the distributions-

Jerome Powell: (15:03)
And available at the time of our policy announcements, including the distributions of forecasts and how participants judge the uncertainty and risks that attend their projections. Second, we will add two new graphs that show how the balance of participant’s assessments of uncertainty and risks have evolved over time. These changes to the SEP will provide a timely perspective on the risks and uncertainties that surround the modal or baseline projections, thereby highlighting some of the risk management considerations that are relevant for monetary policy.

Jerome Powell: (15:32)
To conclude, we understand that our actions affect communities, families, and businesses across the country. Everything we do is in service to our public mission. We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible. Thank you. I look forward to your questions.

Rachel Siegel: (16:00)
Hi, Chair Powell. It’s Rachel Siegel from the Washington Post. Thanks very much for taking my question. I’m wondering if you can speak specifically about what indicators you’re seeing that suggests the pace of improvement has moderated including in the labor market and how correlated those indicators are to the recent rise in COVID cases that we’ve seen going into flu season. Thank you.

Jerome Powell: (16:23)
Sure. So of course, let’s start with February. In February, we had an economy that was performing well, then the pandemic hit and we had a record decline in activity in March and April. And then we had a record bounce back in May and June. And so as I think would have been expected and was expected, the pace of improvement from May and June has now moderated. So it’s not unexpected. And I think if you look at just about anything, for example, the payroll readings, the payroll job gains in May and June were just outsized. And that there are certainly still very large, but the pace of improvement has moderated. That’s the case for all different measures in the labor market. Another would be claims, just about all the data showed a big bounce back, but then as you would expect, when you sort of had a lot of people go back to work at once, the pace will moderate. Same thing with economic activity, most forecasts call for still a significant growth in the fourth quarter, but not at the 33% annualized pace that we had in the third quarter.

Jerome Powell: (17:31)
So in a sense that would be as expected. We have been concerned that the downside risks though, are prevalent now, which are really the risk of the further spread of the disease. And also the risk that households will run through the savings they’ve managed to accumulate on their balance sheet. And that that could weigh on activity. But what we see up to the present really is continued growth, continued expansion, but at gradually moderating pace.

Rachel Siegel: (18:07)
Thank you.

Speaker 1: (18:07)
Marty Kreisinger. Associated Press.

Marty Kreisinger: (18:11)
Thank you. Could you talk a little bit about where you think the stimulus package they just being debated in Congress is, and how severe a threat that could be to the economy if it does not get passed say before January?

Jerome Powell: (18:32)
So it is obviously it’s for Congress to decide the timing, size, and components for the fiscal support for the economy. And I will say that the support provided by the CARES Act was absolutely essential in supporting the recovery that we’ve seen so far, which has generally exceeded expectations. And I do think it’s likely that further support is likely to be needed for monetary policy and fiscal policy. I just mentioned the two risks that I think we face, and those would be well addressed through more fiscal policy. One is the further spread of the virus and the other is the lapsing of the CARES Act benefits and the savings on people’s balance sheets that will dwindle. But I think it’s appropriate for us not to try to prescribe for Congress exactly what they should do or what the timing of it should be, or what the size of it should be and leave it at that.

Speaker 1: (19:26)
Nick Timiraos.

Tim Timiraos: (19:32)
Thanks Chair Powell. Hello, Nick Timiraos at the Wall Street Journal. To follow on Marty’s question, you really have been saying since April that more is needed on the fiscal policy front, and yet we don’t seem to be that much closer than we were in the spring or the summer to additional spending. Two questions. Would the lack of fiscal support compel the Fed to provide additional accommodation? And are you and your colleagues being more vocal about the need for fiscal support because the capacity for monetary policy to support growth is diminished here given the low level of short and long-term rates. Thank you.

Jerome Powell: (20:11)
So in your first question, we’ll take into account all external factors and do what we think we need to do with the tools that we have to pursue our goals. That’s what we will do. And I’ve said it on a couple of occasions that that will go better and move more quickly if we have a broad set of policies from across the government. And we’ve said this from the very beginning, it’s really first and foremost healthcare policy getting the spread of the virus under control and working on therapeutics and vaccines and that kind of thing, so that those are absolutely critical to the economy. Those are important as well as health policies, they’re going to be critical to the economy. Fiscal policy can do what we can, which is to replace lost incomes for people who are out of through no fault of their own.

Jerome Powell: (20:58)
And then what we can do is we can obviously support financial stability through our lending programs and we can support demand through interest rates and asset purchases and that sort of thing. So we’re going to take the economy as it comes, including all external factors. And so I think all of us live through the experience of the years after the global financial crisis and for a number of years there in the middle of the recovery fiscal policy was pretty tight. And I think I just would say that I think we’ll have a stronger recovery, if we can just get at least some more fiscal support when it’s appropriate and the size Congress thinks it’s appropriate. I do think that that will likely, and by the way, you see a lot of discussion on both sides of the aisle, on both sides of the Hill that suggests generally that there will be something.

Speaker 1: (22:02)
Thank you, Steve Liesman, CNBC.

Steve Liesman: (22:06)
Thank you. Mr. Chairman, I’d also to follow up on sort of what Nick was talking about. Two questions about quantitative easing. The first is if the market is functioning better as you and other Fed officials have said, and QE right now is designed for small and mid market functioning, why haven’t you reduced QE that you’re doing if the market is functioning better already? The second question I have is, what good for the broader economy would additional QE do at this point, given that interest rates are already low and don’t seem to be rising even up above 1%. Thank you.

Jerome Powell: (22:43)
So on the first question, our asset purchases are serving both purposes of financial market function and support for economic activity. And that’s really been true. I think in the very beginning of the crisis, the main focus was obviously financial market function, particularly in some of the major markets. But after that period, we’ve understood all along that our purchases are also supporting economic activity and that’s important and that need hasn’t dwindled at all. So, we haven’t looked at reducing purchases. So in terms of what they can do, first, I would just say the purchases that we have in place are providing strong support to economic activity still, and by the way, they’re sustaining the gains we’ve made in financial stability. We don’t take anything for granted, we don’t expect that things will deteriorate, but nonetheless, we have a habit of keeping things in place for a while. So we’re not taking our gains and financial market function for granted. Although, admittedly been they’ve been very large.

Jerome Powell: (23:57)
So the asset purchases are just another very important piece of the accommodative policy stance that we have. And as you know, that these were buying 120 billion a month, that’s 1.44 trillion, if I remember my times tables. And it’s just providing a lot of support for economic activity. And by the way, removing just about the same amount of duration risk from private hands as QE3 did. So this is a big program and it’s doing a lot of good. And we also, today we had a full discussion of the options around the asset purchase program. And we understand the ways in which we can adjust the parameters of it to deliver more accommodation. If it turns out to be appropriate right now, we think that this very large effective program is delivering about the right amount of accommodation and support for the markets and so it continues.