Federal Reserve press conference, 2020-07-29 — Chair Jerome Powell

Question (Edward Lawrence, Fox Business): Thank you, Mr. Chairman, for taking the question. So you talked about it several times today: The FOMC statement directly says the path of the economy is linked to the path of the virus. It looks like a vaccine might come this year, either in October or towards the end of the year. Has the Committee talked about how that might change Fed policies? And, as a follow, do you see a vaccine helping inflation get back to where you want it to be? Thank you.
Answer: So we—of course, the concept of vaccines comes up in our discussions. Of course it does. But I have to say, you know, we’re—our job is not to plan for the upside case, right? The upside case—we’ve got that covered. Our job is to plan for all—the full range of things that could happen. And so we’re assuming—we’re going to continue to assume that our facilities are needed, that our policies are needed, and that the public needs—you know, needs the support that we’re giving the public until—until shown otherwise. There’s great uncertainty around the development of therapeutics and vaccines. All of us want them to happen as soon as possible, but we can’t plan on that. We’ve got to hope for the worst—hope for the [laughs]—hope for the best and plan for the worst, I guess it goes. In terms of inflation, I don’t know. I mean, I—you know, I think, fundamentally, this is a disinflationary shock. I know there—there is a lot of discussion about how this might lead to inflation over time, but, you know, we’re—we’re seeing disinflationary pressures around the world going into this. Now we see a big shock to demand, and we see core inflation dropping to 1 percent. And I do think for quite some time we’re going to be struggling against disinflationary pressures rather than against inflationary pressures.

Question (Ann Saphir, Reuters): Sorry—for when it would be reasonable for the Fed to consider raising— —rates again.
Answer: So as I—as I said earlier, or a while back, we’re not even thinking about—thinking about raising rates. We’re—we’re totally focused on providing the economy the support that it will need. We think that the economy will need highly accommodative monetary policy and the use of our tools for an extended period. And we’re absolutely committed to staying in this until—until we’re very confident that that is no longer needed. So I wouldn’t look for us to be sending signals about cutting back on facilities or anything like that for a very long time. We’re—we’re in this until—until we’re well through it. And I think this—you know, I think the picture is, you have the—you have the lockdown, then you have the reopening. But there’s probably going to be a long tail where a large number of people are struggling to get back to work because those—those heavily affected areas of the economy are going to be challenged, really, to employ the millions of people who are now out of work. I think 14 million people are now out of work who were working in February, something like that. So that’s going to take a while, I think, in everyone’s reckoning. And I just—everyone should know that we’re going to be there for all of that.