January 27, 2021
Statement·Presser·Minutes·Policy
Jerome H. Powell
January 27, 2021 FOMC Press Conference
- The chair said the housing sector has more than fully recovered from the downturn, supported in part by low mortgage interest rates.
- The chair said employment fell by 140,000 in December, with the leisure and hospitality sector losing nearly half a million jobs, largely from restaurants and bars.
- The chair said the real unemployment rate is close to 10 percent if you include people who have left the labor force.
- The chair said the increase in the balance sheet since last March has materially eased financial conditions and is providing substantial support to the economy.
- The chair said the economy is a long way from the employment and inflation goals, and it is likely to take some time for substantial further progress to be achieved.
From the opening statement
Press conference
CHAIR POWELL. 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 FOMC and I kept interest rates near zero and maintained our sizable asset purchases. These measures, along with our strong guidance on interest rates and our balance sheet, will ensure that monetary policy will continue to deliver powerful support to the economy until the recovery is complete.
The path of the economy continues to depend significantly on the course of the virus. A resurgence in recent months in COVID-19 cases, hospitalizations, and deaths is causing great hardship for millions of Americans and is weighing on economic activity and job creation. Following a sharp rebound in economic activity last summer, the pace of the recovery has moderated in recent months, with the weakness concentrated in the sectors of the economy most adversely affected by the resurgence of the virus and by greater social distancing. Household spending on services remains low, especially in sectors that typically require people to gather closely, including travel and hospitality. And household spending on goods has moderated following earlier large gains.
In contrast, the housing sector has more than fully recovered from the downturn, supported in part by low mortgage interest rates. Business investment and manufacturing production have also picked up. The overall recovery in economic activity since last spring is due in part to federal stimulus payments and expanded unemployment benefits, which have provided essential support to many families and individuals. The recently enacted Coronavirus Response and Relief Act [Consolidated Appropriations Act, 2021] will provide additional support. Overall economic activity remains below its level before the pandemic, and the path ahead remains highly uncertain.