As Long as it Takes


By Isaac Cohen*

There is a saying in Wall Street “do not bet against the FED.” Now better add “first, listen to the FED.” The reason is because the central bank recently confirmed several monetary policy elements.

To start by where the US economy is, the last statement from the Open Market Committee said: “the path of the economy will depend significantly on the course of the virus, including progress on vaccinations. The ongoing public health crisis continues to weigh on economic activity, employment, and inflation, and poses considerable risks to the economic outlook.”

That is, even after the approval of the last rescue plan, the US economy still needs fiscal and monetary support. On the fiscal side, over the weekend, $1,400 checks were sent to 90 million adults, amounting to $242 billion. On the monetary side, the central bank will continue providing support for the economy keeping interest rates near zero and monthly purchases of at least $120 billion of government and mortgage-backed securities. Also, despite projecting that this year the US economy will grow at an estimated rate of 6.5 percent, the fastest since 1983, the target for inflation is now an average of 2 percent over time, because for a decade the rate of inflation has remained below the target. Finally, at the press conference after the meeting last week, Chairman Jerome Powell said these measures will continue “for as long as it takes.”

*International analyst and consultant, former Director ECLAC Washington. Commentator on economic and financial issues for CNN en Español TV and radio, UNIVISION, TELEMUNDO and other media.  

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