Fed Chairman Bauer attended the two-day congressional semi-annual hearing on Tuesday (23rd). He said that the US economic recovery is uneven and incomplete, price pressures remain mostly flat, and the economic outlook remains high. Uncertainty means that the Fed will continue the current loose monetary policy.
Outsiders are concerned that the rise in U.S. bond yields and the accompanying inflation concerns may force the Fed to withdraw policy support prematurely. Bauer said on Tuesday that the US economy is still a long way from our employment and inflation goals, and it may take some time to make substantial further progress.
Bauer said that after the spring plunge, consumer prices rebounded partially for the rest of last year. However, for some industries most affected by the epidemic, prices are still particularly soft. Overall, the inflation rate is still below the Fed’s long-term target of 2%.
Bauer also mentioned that although the labor market has made great progress since the spring, millions of Americans are still unemployed.
He added that the unemployment rate of low-wage workers, African Americans, Hispanics and other minorities is particularly serious. The economic chaos killed many people and brought great uncertainty to the future.
Bauer reiterated that the Fed is committed to using all tools to support the economy and to help ensure that the economic recovery during this difficult period is as strong as possible.
In terms of the impact of the new crown epidemic on the economy, Bauer mentioned that although the challenges posed by the current epidemic should not be underestimated, the state of affairs shows that the economic outlook will improve later this year. In particular, the progress being made in vaccination should help accelerate the return to normal activities.
Bauer pointed out that the real estate industry has completely recovered from the recession, while business investment and manufacturing production are also picking up. The active policies of the Fed and Congress are important factors in economic recovery.
MacKay Shields senior macro economist Steve Friedman said that in view of the new crown virus, the United States has not yet come out of the predicament, and the economy is still far away from a full recovery. Bauer has always been very concerned about the fact that the new crown epidemic has caused millions of workers and their families to face huge difficulties in life.
However, Ball did not mention the rapid rise in the yield of long-day U.S. Treasuries this year. Long-term U.S. Treasury yields jumped to the highest level before the COVID-19 pandemic in 2021. For example, 30-year U.S. Treasury yields rose by more than 0.5%, and 10-year U.S. Treasury yields rose by 44 basis points.
After Bauer’s dovish remarks were released, around 11:30 p.m. Taipei time,USDA slight increase, temporarily reported at 90.14, gold converged most of the decline, temporarily reported at 1,808.25 USD, The 10-year U.S. Treasury fell 0.77% in response.
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