MNI POLICY: Fed To Act Promptly, Flexibly In Recovery -Bowman

Federal Reserve Governor Michelle Bowman said Wednesday policy makers remain ready with quick and flexible action if needed for an economy that is "still far from back to normal" amid the Covid-19 pandemic.

"The Federal Reserve will continue to monitor progress and respond promptly and flexibly to support the recovery," Bowman said in prepared remarks for a Kansas Bankers Association annual meeting. "We will closely watch economic and financial conditions, and we will use our monetary policy tools to respond as appropriate to pursue our dual mandate of maximum employment and price stability."

Households and businesses remain vulnerable to falling behind on loans as earlier rounds of Congressional stimulus money wears out, and to the different status of health restrictions or re-openings across different regions, she said.

"Timely and supportive fiscal and monetary policy measures also have helped, but with the progress of the recovery still tentative, I expect that many businesses will continue to fight for survival in the months ahead," she said. "Progress toward a full recovery in economic activity may well be slow and uneven," even with some positive signs to date, Bowman said.

The former community banker added the Fed continues to seek feedback on how it could adjust its Main Street lending program to be "more effective." Banks entered the pandemic with high levels of liquidity and are well positioned to continue to extend credit to support the recovery, she said.