Powell says the economy will likely need more support from the Fed for the recovery to be ‘robust’

Federal Reserve chairman Jerome Powell said more stimulus is needed to ensure a robust economic recovery from the coronavirus crisis.

“It may well be the case that the economy will need more support from all of us if the recovery is to be a robust one,” Powell said in a virtual press conference on Wednesday following the central bank’s policy decision. “Will there be a need to do more though? I think the answer to that would be yes.”

“We have a number of dimensions on which we can still provide support to the economy as you know our credit policies are not subject to specific dollar limit,” Powell said. “They can be expanded as needed and we can do new ones, so we can continue to be part of the answer.”

In a bid to offset the economic damage from the coronavirus damage, the Fed has slashed its benchmark interest rate to near zero and launched a variety of programs that also look to get money to households and businesses in need.

“We can do what we can do, and we will do it to the absolute limit of those powers,” Powell added.

Following this week’s Federal Open Market Committee meeting, the central bank said it would maintain its current interest rate target between 0{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} and 0.25{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f}. It pledged to keep rates near zero until full employment returns and inflation gets back to around the Fed’s long-stated 2{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} goal.

The U.S. economy shrank 4.8{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in the first quarter, marking the biggest decline since the worst of the financial crisis.

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