Powell Says Economy May Be Entering ‘New Normal’ After Pandemic
Federal Reserve Chair Jerome Powell said the US economy may be entering a “new normal” following disruptions from the Covid-19 pandemic.
“We continue to deal with an exceptionally unusual set of disruptions,” Powell told business and community leaders Friday at a Fed Listens event in Washington. “As policy makers we’re committed to using our tools to help see the economy through what has been a uniquely challenging period.”
In his brief welcoming marks, Powell didn’t discuss the outlook for interest rates or offer more specifics on the economic outlook. All seven of the Board’s governors were present for the panel with Philip Jefferson and Lisa Cook making public comments in their roles as Fed officials for the first time.
Fed officials heard a consistent message that shortages and scarcity were still afflicting businesses along with high labor turnover. Speaking about the small- and medium-sized companies they consult with, Cara Walton, for Harbour Results in Southfield, Michigan, said her clients “can’t find people,” and when they do find them, turnover is high.
US central bankers raised their benchmark lending rate by three quarters of a percentage points this week for a third straight time -- the most aggressive pace of tightening seen since the Fed battled inflation back in the 1980s.