Powell Highlights Slower Recovery for Low-Wage and Minority Workers

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WASHINGTON—Federal Reserve Chairman

Jerome Powell

said Monday that the economic outlook has brightened but is advancing more slowly for low-wage workers, underscoring the need for continued support from policy makers.

The Covid-19 pandemic has had outsize effects on minority workers and women, Mr. Powell said, citing results from a Fed survey that will be released later this month. While 22% of parents either stopped working or worked less in 2020 because of the pandemic’s disruptions to child care or schooling, that figure jumps to 36% and 30% for Black and Hispanic mothers, respectively, he said.

“The Fed is focused on these longstanding disparities because they weigh on the productive capacity of our economy,” Mr. Powell said in prepared remarks for a speech to the National Community Reinvestment Coalition.

He included little commentary on the broader economy in his opening remarks, saying that, while the economic outlook has brightened, “we are not out of the woods yet.”

Fed officials voted unanimously last week to hold interest rates near zero and to continue purchasing at least $120 billion a month of Treasury and mortgage bonds. Those policies, in place since the first half of last year, aim to smooth the economy’s recovery by keeping borrowing costs low.

The Fed says it will hold interest rates steady until the labor market has fully recovered from the effects of the pandemic and inflation has reached its target of averaging 2% a year. Officials don’t plan to begin scaling back the asset purchases until the economy has made “substantial further progress” toward those goals.

Fed officials noted last week that employment, growth and inflation have all turned upward recently. But Mr. Powell said at a press conference Wednesday that “it’s not time yet” for officials to start discussing a pullback in the Fed’s asset purchases.

Recent changes to the Federal Reserve’s monetary policy framework could boost prospects for marginalized groups. Raphael Bostic, President of the Federal Reserve Bank of Atlanta, explains. (Video from 12/17/20)

Write to Paul Kiernan at [email protected] and Andrew Ackerman at [email protected]

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