The Federal Reserve left interest rates near zero and Jerome H. Powell, the Fed chair, predicted a long road ahead as a recent spike in virus cases saps momentum from the nascent economic recovery, The New York Times reported. “The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in keeping the virus in check,” Mr. Powell said, noting that infections have surged since late June and the “pace of recovery looks like it has slowed.” Powell said policymakers needed more data before drawing firm conclusions about the scope of the pullback, but he noted that debit and credit card spending were slowing and labor market indicators suggested that recent job gains might be weakening. More than 14 million people who held jobs in February are no longer employed, Powell said, warning that it will take a while for workers in certain industries, like restaurants, hotels and travel, to find new jobs. The labor market rebound “is going to take a while,” he said, and “we’re going to be there for all of that.” While the Fed took no major actions, Powell’s comments underlined both the peril ahead for American workers and the reality that interest rates are likely to be very low — making money cheap to borrow — for an extended period of time. Stock prices climbed following his remarks as investors took heart in the Fed’s patient stance. Ahead of Powell’s comments, the central bank reiterated in its post-meeting statement that the Fed would keep low rates in place “until it is confident that the economy has weathered recent events.” The Fed’s announcement came as another round of tense negotiations continued in Congress over providing more support to workers and businesses still struggling amid the pandemic, including whether to extend an extra $600 per week in unemployment benefits that is set to expire this week.
