Powell: "US Economic Outlook Clearly Brightens"

New York Fed President Expects 7% Growth Rate This Year

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), described the outlook for the U.S. economy as significantly brighter. Analysts noted that Powell's remarks were more positive compared to a week earlier.

On the 3rd (local time), Powell said, "While some countries are still enduring the terrible pain of COVID-19, the outlook for the U.S. economy has clearly improved."

He added, "We are not yet out of the woods, but I am pleased to say we are making real progress."

The economic media MarketWatch evaluated Powell's remarks as more optimistic than the Fed's statement and press conference a week ago, which had already assessed the U.S. economic outlook more positively than before.

However, Powell cited the upcoming annual "Survey of Household Economics and Decisionmaking" (SHED) to emphasize that disparities in COVID-19 impact by race remain significant, stating, "We can reach our full potential only when everyone can contribute to and share in the benefits of prosperity." He also revealed that the Fed will focus on overcoming racial economic disparities.

Powell's stance aligns with that of John Williams, President of the New York Federal Reserve Bank, considered the Fed's "third-in-command," who projected a 7% U.S. economic growth rate this year.

Williams said, "Due to accommodative financial conditions, strong fiscal support, and widespread vaccination, we expect this year's economic growth rate to be at a pace not seen since the early 1980s."

He continued, "Real Gross Domestic Product (GDP) is expected to increase by about 7% this year," describing it as "a welcome advance following the harshest economic period remembered by modern generations."

The 7% growth rate mentioned by Williams exceeds the Fed's forecast of 6.5% for U.S. economic growth this year.

Williams also noted that inflation will continue to exceed the 2% target this year but cautioned, "We should not overreact."

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