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Early Tuesday in Asia, late Monday elsewhere, the US Federal Reserve released prepared remarks of Chairman Jerome Powell’s Testimony over the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). Fed Chair is going to accompany Treasury Secretary Janet Yellen in front of the House Financial Services Committee as part of the testimony.

Although most comments from Fed Chair Powell repeated his earlier cautious optimism, statements suggesting the Fed’s firm readiness to keep the monetary policy support seem to be the key. “The recovery has progressed more quickly than generally expected and looks to be strengthening,” said Powell. “But the recovery is far from complete, so, at the Fed, we will continue to provide the economy the support that it needs for as long as it takes,” added the central banker.

His additional remarks signaled the need for more stimulus and hence supporting continuation of easy money policies.

Economic recovery is far from complete, though situation today is much improved.

Indicators of economic activity and employment have turned up recently.

6.2% unemployment rate underestimates labor market shortfall, particularly as participation remains notably below pre-pandemic levels.

Fed will continue to support the economy for as long as it takes.

Path of the economy continues to depend on the course of the virus.

FX implications

Although the market is yet to respond to the news, the Fed’s rejection of the tapering woes could help risk barometers to extend the latest recovery moves.

Read:  AUD/USD seeks fresh clues to stay positive around mid-0.7700s