Federal Reserve Chairman Jerome Powell speaks during a House Financial Services Committee hearing in Washington, DC on Tuesday, February 11, 2020.
Andrew Harrer | Bloomberg | Getty Images
Federal Reserve chairman Jerome Powell pledged to continue to support an economy that he said has improved significantly but still needs more work.
In a comment the central bank chief will make to the House Financial Services Committee on Tuesday, Powell reiterated the Fed's commitment to helping the economy through the coronavirus pandemic and explained what has been done so far.
"We continue to seek to do what we can with our instruments for as long as possible to ensure the strongest possible recovery and limit the permanent damage to the economy," Powell said on his prepared testimonial. The gig is one of three performances Powell will be making on Capitol Hill this week.
The Fed has cut short-term interest rates to near zero and launched 13 credit and liquidity programs that have helped ease market stress and provide credit to companies. In addition, last week the Federal Open Market Committee pledged not to raise interest rates until inflation rises above 2%.
While Powell said the accommodation policy will continue as needed, he added that the economy has improved.
"Economic activity has recovered from its low level in the second quarter when much of the economy was shut down to contain the spread of the virus. Many economic indicators are showing significant improvement," he said. "However, both employment and macroeconomic activity remain well below their pre-pandemic levels and the way forward remains very uncertain."
The Fed's support programs have the potential to provide more than $ 2 trillion in various tiers of funding, though some have seen little use.
The Main Street Lending program, which is aimed at small and medium-sized businesses, has only tied about $ 2 billion, though it has the potential for $ 600 billion. A facility where the Fed can buy corporate bonds on the primary market was not used at all.
Still, Powell said the facilities total unlocked about half of their potential funding and will be ready should market pressures reappear.
"Our economy will fully recover from this difficult period," he said. "We continue to strive to use all of our tools to support the economy as long as necessary."