jerome h powell : semi - annual monetary policy report to the congress speech by mr jerome h powell, chair of the board of governors of the federal reserve system, before the committee on financial services, u. s. house of representatives, washington dc, 14 july 2021. * * * chairwoman waters, ranking member mchenry, and other members of the committee, i am pleased to present the federal reserve ’ s semiannual monetary policy report. at the federal reserve, we are strongly committed to achieving the monetary policy goals that congress has given us : maximum employment and price stability. we pursue these goals based solely on data and objective analysis, and we are committed to doing so in a clear and transparent manner. today i will review the current economic situation before turning to monetary policy. current economic situation and outlook over the first half of 2021, ongoing vaccinations have led to a reopening of the economy and strong economic growth, supported by accommodative monetary and fiscal policy. real gross domestic product this year appears to be on track to post its fastest rate of increase in decades. household spending is rising at an especially rapid pace, boosted by strong fiscal support, accommodative financial conditions, and the reopening of the economy. housing demand remains very strong, and overall business investment is increasing at a solid pace. as described in the monetary policy report, supply constraints have been restraining activity in some industries, most notably in the motor vehicle industry, where the worldwide shortage of semiconductors has sharply curtailed production so far this year. conditions in the labor market have continued to improve, but there is still a long way to go. labor demand appears to be very strong ; job openings are at a record high, hiring is robust, and many workers are leaving their current jobs to search for better ones. indeed, employers added 1. 7 million workers from april through june. however, the unemployment rate remained elevated in june at 5. 9 percent, and this figure understates the shortfall in employment, particularly as participation in the labor market has not moved up from the low rates that have prevailed for most of the past year. job gains should be strong in coming months as public health conditions continue to improve and as some of the other pandemic - related factors currently weighing them down diminish. as discussed in the monetary policy report, the pandemic - induced declines in employment last year were largest for workers with lower wages and for african

the federal reserve has published all of the legal documents that borrowers and lenders will need to sign under the program and lender registration began on june 15. loan participations will be purchased soon. additionally, the federal reserve recently sought feedback on a proposal to expand the main street program to include loans made to small and medium - sized nonprofit organizations, such as hospitals and universities. nonprofits provide vital services around the country, and the program would likewise offer them support. while businesses in certain sectors that were particularly hard hit by the pandemic have reported continued difficulty in accessing credit, the small business administration ’ s paycheck protection program ( ppp ), which draws from existing bank lines, has apparently met the immediate credit needs of many small businesses. in the months ahead, main street loans may prove a valuable resource for firms that were in sound financial condition prior to the pandemic. to bolster the effectiveness of the small business administration ’ s ppp, on april 16, the federal reserve launched the paycheck protection program liquidity facility. the facility supplies liquidity to lenders backed by their ppp loans to small businesses and has the capacity to lend up to the full amount of the ppp. as of last week, the facility held over $ 65 billion in outstanding term loans to participating financial institutions. the most recent monthly survey from the national federation of independent business released in may indicates that small businesses have been able to meet their funding needs in recent months largely due to the ppp. 2 to help state and local governments better manage cash flow pressures in order to continue to serve households and businesses in their communities, the federal reserve, together with the treasury department, established the municipal liquidity facility ( mlf ). the mlf is backed by $ 35 billion of cares act equity and has the capacity to purchase up to $ 500 billion of short - term debt directly from u. s. states, counties, cities, and certain multistate entities. the facility became operational on may 26, and, to date, the mlf has purchased $ 1. 2 billion worth of short - term municipal debt. with the mlf and other facilities in place as a backstop to the private market, many parts of the municipal bond market have significantly recovered from the unprecedented stress experienced earlier this year. municipal bond yields have declined considerably, issuance has been robust over the past two months, and market conditions have improved. 3 the tools that the federal reserve is using