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Powell on recovery: We're starting to make progress

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Yahoo Finance's Brian Cheung breaks down Fed Chair Jerome Powell's latest comments on economic recovery.

Video Transcript

ZACK GUZMAN: So you could say, all right, more of the same Jay Powell. Same old, same old. But let's bring in our Fed expert here in Brian Cheung to break down what maybe we did learn about his new stance. And Brian, talk to me about what you listened to there as he again reaffirmed the confidence here in this recovery.

BRIAN CHEUNG: Well, a lot of disappointment for people who were watching the Fed and ended up having to watch the end of the Masters because "60 Minutes" did start a little bit delayed last night as a result of that event there. But again, the "60 Minutes" interview with Jay Powell, as you mentioned, kind of saying the same old things. And in fact, Jay Powell in that clip that we just played for you, recycling the analogy of people left on the beach. You'll recall that he used a Dunkirk reference in an NPR interview about two weeks ago. And the idea is that with 8.5 million to 9 million people still on the sidelines compared to pre-pandemic levels in February of last year, the Federal Reserve will continue to hold interest rates near zero and continue to aggressively purchase assets until it can get a large portion of those people back to work and until they can get the labor market back to what they might define as maximum employment.

Now what was interesting about the "60 Minutes" interview was that it wasn't necessarily part of the segment that you saw, but it was in the transcript of the full interview that Scott Pelley at CBS had with Jerome Powell, where Powell said something to the effect of he expects as a baseline case to continue to see a string of months of maybe one million job gains, which was the case in March of 2021. Now if that is the case, the Fed Chairman saying that might constitute further progress towards the Fed's goals of dual mandate and price stability, when at that point that might be when the Federal Reserve does end up starting to taper its asset purchases. Because again, keep in mind, it's been buying about $120 billion a month.

So that's the only real new detail that we got from that interview yesterday. On a number of other topics, the Chairman was asked about the Archegos family office implosion from a few weeks back. You'll recall the first time the Fed Chairman opined on that, he was saying he doesn't think it presents financial stability issues to the system at large, but said the Federal Reserve is monitoring the issue. But again, on the broad issue of monetary policy, the Federal Reserve Chairman saying he doesn't necessarily see the case for a rate hike at least this year. Again, reiterating that the Fed for at least right now will be patient with its monetary policy. Zack, Akiko.