Powell Says Too Soon To Tell If Fed Did Too Much In Virus Response

Q: Do you want to get inflation below 2% so on average you get 2%, and is there some kind of circuit breaker that would stop you from raising rates on the employment side?

• A: There's nothing in our framework about having inflation run below 2%... we're trying to keep expectations well-anchored at 2%.
• In a situation where the two goals are in tension is difficult, but I don't think they are here, because a significant threat to labor market over time is high inflation and also high inflation is taking away the benefits of large wage increases, so we hope to achieve on both goals.

Q: Was the gov't stimulus response to Covid more than what the economy ended up needing?

• A: It's too soon to write that history... the was a real risk of lasting damage at the beginning of the pandemic...in realtime it was a remarkable achievement and even staved off a collapse of the financial system... we have had the strongest recovery of any country and unlike any that we've had. Was it too much? I'll leave that to the historians.