SAN FRANCISCO, Oct 13 (Reuters) – The US Federal Reserve’s promise to keep interest rates close to zero for a period that could drag on for years is “appropriate” for now, although further action may be needed with it The recovery is progressing, Mary Daly, president of the San Francisco Federal Reserve, said Tuesday.
“We have the economy and monetary policy in a good position right now,” Daly told the media at an online conference. “I see us well positioned to weather this storm we are in, and it remains to be seen if more will be needed. … I will continue to look at the data and see if any adjustments are necessary.”
The Federal Reserve cut interest rates to zero in the face of the coronavirus pandemic and began pumping trillions of dollars into financial markets, extraordinary initiatives that have helped raise equity prices, although the real economy is in serious trouble, with millions of Americans still unemployed.
The situation, Daly said in a virtual presentation Tuesday by the University of California, Irvine, “seems unfair (and) another example of Wall Street winning and Main Street losing,” alluding to the economy. real.
However, keeping interest rates at their current levels near zero until the economy returns to full employment, as the Federal Reserve has promised, will create more jobs over time and help reduce inequality, Daly said.
And while it’s true that raising rates earlier could prevent the already wealthy from increasing their wealth further, according to Daly, it would also exacerbate inequality by making jobs for everyone else even harder to come by.
“I’m not willing to sacrifice millions of jobs … to keep the stock market from going up for the few who have those stakes,” he said.
(Information from Ann Saphir; edited by Sandra Maler and Stephen Coates; translated by Tomás Cobos)