“Our economy is very far from our employment and inflation targets” – Global

“After the strong declines in the spring, retail prices began with a recovery that lasted until the end of the previous year,” Powell said. In his speech, he added – “In a number of sectors that have suffered the strongest blow in the epidemic, prices have remained particularly low and sensitive. Overall and on a 12-month basis, inflation is below 2%, our long-term target. “Our economy is very far from our employment and inflation targets, and it will probably take time for significant progress to be made.”

These statements mean that there is a high chance that, in light of the weak economy, the continuation of asset purchases will continue. That is, continued support for the markets will continue. “In the past year, U.S. monetary policy has undergone a revolution with the adoption of an average-flexible inflation target and widespread implementation of market intervention tools and credit measures that were not there before,” says Dr. Gil Baffman in the wake of the speech. Broad and comprehensive in the labor market. As Powell noted, the high level of unemployment was particularly severe for lower-wage workers and African-Americans, Hispanics and other minority groups. ”

Chairman Powell said in his speech in this context that the Fed will not reduce the expansionary monetary policy in response to a strong labor market. This means that the Fed will not make any move as long as the unemployment rate does not return to 4% and below, In the long run, “there is expected to be an emphasis on unemployment rates for minorities and low-wage workers,” Befman updates, “that is, on achieving a broad degree of recovery in the labor market before any downsizing move. It seems that the Fed will prefer to define any increase in inflation as a result of temporary factors, at least until proven otherwise, in order to avoid a policy response to the expected increase in inflation this year. It seems that this June affidavit may work to curb the recent rise in US bond yields.