FOMC

The Federal Reserve is nowhere near to pulling back on its support for the pandemic-damaged U.S. economy, Chairman Jerome Powell signaled at his testimony before Congress on Tuesday.

U.S. Treasury Secretary Janet Yellen and Federal Reserve Chair Jerome Powell appear wary of signs of froth in financial markets, even as they press ahead with economic stimulus measures that are elevating the euphoria.

Rising Treasury yields are a sign of optimism in the economic recovery, said a senior Federal Reserve official Friday, signaling no inclination from the central bank to take steps to halt the shift.

Federal Reserve actions will continue to bolster the U.S. economy as it battles the COVID-19 pandemic, the central bank said Friday in its twice-yearly update to Congress.

Former U.S. Treasury Secretary Lawrence Summers warned that the Federal Reserve will likely be pressured into raising interest rates sooner than markets expect, and perhaps as early as next year.

Federal Reserve Bank of Boston President Eric Rosengren said he doesn’t expect to see sustained 2% inflation for the next two years so long as U.S. unemployment remains high.

The municipal secondary gave way to higher-yields and triple-A benchmarks rose two to five basis points. U.S. Treasuries pared back Tuesday's losses, even on the heels of better economic data.

Federal Reserve officials did not see the conditions for reducing their massive asset-purchase program being met for “some time” at their January policy meeting, a record of the gathering showed.

Federal Reserve officials said the economy continues to be disrupted by the pandemic with one regional central bank chief dismissing the threat that inflation could get out of hand.

The COVID-19 pandemic threw the economy into disarray, creating uncertainty in so many areas, and economists still don’t agree on the future of inflation. But they agree the Fed will need to adjust when the economy starts to improve.