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Fed Chairman Powell
Photo: Kevin Lamarque / REUTERS
The US Federal Reserve (Fed) wants to throw everything in its power into the balance to overcome the corona crisis.
The central bank continues to commit to using the full range of its instruments, Fed Chairman
Jerome Powell
(67)
affirmed,
according to a previously published speech.
Powell will speak to the House of Representatives Committee on Financial Services Tuesday.
The Fed will use the instruments for as long as necessary, Powell said.
It must be ensured that the economic recovery is as strong as possible.
Powell uses words that are strongly reminiscent of the famous "whatever-it-takes" speech by the then head of the European Central Bank (ECB),
Mario Draghi
(73).
"We will do what we can, as long as it takes," explains Powell.
more on the subject
Details on the new strategy: US Federal Reserve to cement zero interest rate policy until 2023
Last week, the monetary authorities around Powell had promised to keep interest rates close to zero until inflation was on the way to "moderately exceed" the target of 2 percent inflation "for some time".
Behind this is the recently announced change in strategy by the US Federal Reserve.
According to the new "Average Inflation Targeting" model, it tolerates higher inflation rates over a certain period of time in order to compensate for previous phases with low inflation.
Economists such as BlackRock's top
woman Elga Bartsch
(54) therefore expect more inflation in the medium term.
Similar to the European Central Bank, the US central bank's room for maneuver is now relatively limited.
Last week, the Fed left the US guideline for supplying financial institutions with money in a range between zero and 0.25 percent.
lhy / Reuters