Powell: "If Economic Recovery Delays, Bond Purchases Will Expand"

Guidelines for Bond Purchases Also Presented Until Employment and Inflation Targets Are Met

[Image source=Reuters Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), stated that the asset purchase program will be expanded if necessary.

Chairman Powell said at a press conference following the interest rate hold announcement on the 16th (local time), "If the economic recovery is delayed, the Fed will expand asset purchases."

Powell explained that if it becomes clear that the economic recovery is slowing, the Fed will expand asset purchases to increase its balance sheet and continue an accommodative monetary policy.

Chairman Powell emphasized, "Zero interest rates and asset purchases provide strong support to the economy and will continue to do so."

In a statement released that day, the Fed presented guidelines to maintain the benchmark interest rate at zero (0) and keep the current asset purchase program at about $120 billion per month until employment and inflation targets are achieved, but it did not mention the bond purchase expansion or long-term bond purchases that the market had anticipated.

A significant number of Fed officials also expressed the view that the benchmark interest rate will be maintained at least until 2023.

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