Rep. Maloney Urges Fed Chair Powell to Continue Supporting the Economic Recovery

Jul 14, 2021
Press Release

WASHINGTON, DC — At today’s Financial Services Committee virtual hearing titled “Monetary Policy and the State of the Economy,” Congresswoman Carolyn B. Maloney (D-NY), senior member of the committee, emphasized the importance of the Federal Reserve supporting the American public and economy by continuing its asset purchases for the foreseeable future.


During the hearing, Congresswoman Maloney stated, “The Fed is currently supporting the economy by purchasing $120 billion a month in Treasuries and mortgage securities, and the Fed has said that it will continue these purchases until ‘substantial further progress has been made toward the Committee’s maximum employment and price stability goals’. The minutes from last month’s Fed meeting stated that the Fed is continuing its asset purchases because participants generally did not believe that the goal of ‘substantial further progress’ has been made yet — and I agree. I think it’s far too early for the Fed to start tapering its asset purchases and pulling back on its support for the economy.”


She then asked Chairman Powell to elaborate on what would constitute “substantial further progress” and what conditions would need to be met before he would support the Fed tapering its asset purchases.


Chairman Powell responded, “I would say this: we didn’t try to write down a particular set of numbers that would capture what we mean by that, and it would have been complicated and not particularly worthwhile. So we said ‘substantial further progress,’ which is similar to what we did during the recovery from the global financial crisis years ago. We had a similar set of words for when we would taper asset purchases. So the thing is, it’s very difficult to be precise about it because with maximum employment, there are no three or four or five or six metrics that you can point to. It really is a very broad range of things including wages, unemployment, levels of employment, participation, all those things. So we just said ‘substantial further progress.’ And we also said that we would provide advance notice, well in advance, of actually tapering so that, understanding that this is somewhat of a discretionary test, and that we don’t want to surprise markets or the public so we will provide lots of notice as we go forward on that. And by the way, we’re having another FOMC meeting in a couple of weeks from today, and we’ll have another round of discussions on this very topic.”


You can watch the full exchange below.