Jan. 12 (Reuters) – The US economy could see a strong rebound in the second half of this year as vaccines become widely available, but the virus continues to stimulate the economy and monetary policy will remain accommodative, the president said. Boston Federal Reserve, Eric Rosengren. Tuesday.
“The pandemic will likely continue to be a problem for public health and the economy until widespread immunizations take hold,” Rosengren said in remarks prepared for a virtual event hosted by the Greater Chamber of Commerce. Boston. “Nonetheless, with substantial fiscal and monetary support, I expect a robust recovery from the second half of this year.”
Rosengren said he expects consumption to increase and the unemployment rate to drop in the second half of the year as vaccines are distributed.
Low interest rates are expected to continue to support the housing market and the labor market could post solid gains over the next two years, Rosengren said. But he doesn’t expect inflation to hit the Fed’s 2% inflation target in that same time frame, suggesting that short-term interest rates should remain “very accommodating.” did he declare.
Rosengren also offered an update on the Fed’s Main Street Lending Program, which has seen increased demand and participation in its past month.
More than 1,800 companies used the program last year, taking out more than $ 16.5 billion in loans, Rosengren said. The program also saw a last-minute increase in lender participation, with around 45% of the total pool of lenders participating in December for the first time.
The program, aimed at small and medium-sized businesses needing credit to weather the recession triggered by the coronavirus pandemic, was closed on January 8. (Report by Jonnelle Marte edited by Chizu Nomiyama)