The US Fed remains positive about the country’s economic future even amid a new wave of Covid-19. The recent data showed that the US economy continues recovering.
However, there are some thorny issues. First of all, it is the labor market condition. Notably, the overall economic growth is quite rapid even amid the new coronavirus wave. Some analysts are sure that strong macroeconomic figures are not a reason for a withdrawal of stimulus measures, including the asset purchasing program, imposed in the spring of 2020.
"I would want to see some strong job numbers in the coming months before reducing the $120 billion in monthly bond purchases the Fed continues to make", Fed Chair Jerome Powell said.
Jerome Powell has estimated the risk that the more contagious Delta strain may put on the economy. "It will have significant health consequences in the areas of the country where outbreaks are intensifying," he noted.
Yet in the prior waves of coronavirus infections "there has tended to be less in the way of economic implications. It is not an unreasonable expectation" that would remain the case this time, he also added.
In any case, the Fed is not planning to review the budget of the asset purchasing program until it sees "substantial progress" in the labor market recovery, which is still down more than 5.7 million payrolls from its pre-pandemic level.
"The incrementally more upbeat policy statement opened the door to a September bond taper announcement if job growth comes in strong and the coronavirus caseload does not dent spending," Karim Basta, chief economist at III Capital Management, said.
