US Federal Reserve Chairman Jerome Powell, wearing a face mask, says before the House Financial Services Committee during a hearing on oversight of the Treasury Department and the US Federal Reserve's response to the coronavirus disease (COVID-19 ) on Capitol Hill in New York from Washington, USA, 30 June 2020.
Tasos Katopodis | Reuters
Interest rates are likely to stay low for years as the economy struggles back from the coronavirus pandemic, Federal Reserve chairman Jerome Powell said in comments released Friday afternoon.
"We believe the economy will need low interest rates to support economic activity for an extended period of time," Powell told NPR in an interview after the non-farm payroll report was released earlier in the day. "It is measured in years."
"No matter how long it takes, we will be there. We will not prematurely withdraw the support we need for the economy," he added.
The statement is in line with comments made by Powell and other Fed officials last week.
In a major change in its monetary policy approach, the central bank has now issued a stated policy allowing inflation to hover above the Fed's 2% target for a period after falling below the Fed's 2% target, as was the case for most countries over the past decade.
The move effectively means the Fed will no longer hike rates to counter inflation, which has historically been associated with lower unemployment rates.
Although he didn't list specific measures, Powell said the Fed may not be finished with their housing.
"We have done many things that we can do, but we can do more and we will do them when we see the need to do them," he said.
Powell called the job report "a good one" on Friday. The number of non-farm workers rose by 1.37 million and the unemployment rate fell to 8.4%. This was still more than anything since the beginning of the financial crisis recovery, but much better than the pandemic peak of 14.7%.
Powell re-linked the advancement of the economy to the coronavirus and encouraged people to follow safety guidelines like wearing masks and maintaining social distancing.
"There are actually huge economic gains across the country from people wearing masks and keeping their distance," he said.