Federal Reserve Chair Jerome Powell is set to testify before the House Financial Services Committee on Tuesday, where he will update lawmakers about the ongoing economic recovery amid the coronavirus pandemic.
In prepared remarks released on Monday, Powell noted that the recovery has “progressed more quickly than generally expected” and appears to be strengthening.
“However, the sectors of the economy most adversely affected by the resurgence of the virus, and by greater social distancing, remain weak, and the unemployment rate—still elevated at 6.2 percent—underestimates the shortfall, particularly as labor market participation remains notably below pre-pandemic levels,” Powell’s statement read. “The recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes.”
The Fed chair has maintained the worst-case-scenario economic fallout was avoided thanks to swift action out of Congress to pass fiscal support in the form of the Coronavirus Aid, Relief, and Economic Security (CARES) Act and subsequent relief bills.
He has also repeatedly said, however, that the path of the recovery will depend on the trajectory of the virus.
Last week, the Fed committed to keeping the benchmark federal funds rate near 0% and pledged to continue accommodative monetary policies – like sizable asset purchases – to support the ongoing economic recovery.
The hearing is scheduled to kick off at 12 p.m. ET on Tuesday. Powell will appear alongside former Fed chair – and sitting U.S. Treasury Secretary – Janet Yellen. The pair will specifically address measures taken by the Treasury Department and the Fed to support the economic recovery.