MNI BRIEF: Fed's Powell Sees Challenging Next Few Months

The rise in new Covid cases is "concerning and could prove challenging for the next few months," Federal Reserve Chair Jay Powell plans to tell Congress on Tuesday, while reiterating a pledge to use "our full range of tools to support the economy."

"Recent news on the vaccine front is very positive for the medium term," he said in prepared remarks distributed Monday ahead of his appearance before the Senate Banking Committee. "For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups. It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence."

He also repeated that demand for the Fed's Main Street and other emergency credit programs may increase over time if the pandemic continues to affect businesses, though the Treasury has decided not to make new loans in several of the programs after Dec. 31. His remarks made no mention of forward guidance on interest rates or asset purchases.