Powell Not Looking For a "Big" Reaction Right Now

Q: Do you consider today's enhanced forward guidance to actual accommodation to the economy from a monetary perspective, or just a tweak to the existing stance? And for fiscal support, does the SEP assume more is coming?

A: In terms of the effects, what we've done is "more or less aligned with the consensus"..." it's in line with what might have been expected". "So I'm not looking for a big reaction right now but over time, again, guidance we expect to maintain the current stance until the economy has moved very far toward our goals is a strong and powerful thing and I think that we'll be supportive of the economy over time."

Re fiscal: Broadly, there is an expectation among private forecasters and FOMC participants there will be some further fiscal action and there does seem to be an appetite on the part of all the relevant players to doing something.

The question is how much and when.I would just say, if, it's very hard to say. So far, the economy has proven resilient to the lapsing of the CARES Act unemployment, enhanced unemployment benefits, but, there's certainly a risk, though, that those who were unemployed have saved, appear to have saved some of those benefits and they'll now spend them and that as the months pass, if there's no follow-up on that, if there isn't additional support, and there isn't a job for some of those people or from industries where it's going to be very hard to find new work then that will start to show up in economic activity.

It will also show up in things like evictions and foreclosures and things that will scar and damage the economy.So, that's a down side risk. So, I think the real question is when and how much and what will be the contents. No one has any certainty around that. But, broadly speaking, if we don't get that, then there would certainly be down side risks through the channel I mentioned.