Black Rock Global Fixed Income CIO Rick Rieder says the Federal Reserve will not raise interest rates for quite some time and believes it will grow the size of its balance sheet. He later discusses the possible economic recovery in the second half of the year, how the US markets react to coronavirus and large tech stocks.
U.S. consumers lifted their spending in May and June, but businesses remained cautious because of the sheer uncertainty surrounding the economic outlook, Federal Reserve officials said at a policy meeting last month.
FED UNDERSCORES SUPPORT OF ECONOMIC FIELD DRIVES BY FERUS RESURGENCE
The emerging economic recovery poses several risks, Fed officials said in talks during their most recent meeting on July 28-29. Those risks include another outbreak of the coronavirus and that the U.S. government would retaliate against the financial relief it had provided to households, businesses and state and local governments.
At its meeting in July, the Fed decided to keep the short-term interest rate it controls close to zero and to continue with its purchase of bonds worth about $ 80 billion in treasuries and $ 40 billion in mortgage-backed securities each month.
TOPFED OFFICIAL SUGGESTIONS US ECONOMY CAN RELEASE STEAM
Those bond purchases are meant to inject cash into financial markets to keep credit flowing, and to keep interest rates high.
Federal Reserve Chairman Jerome Powell also warned at a news conference after the meeting that resurgence of viral outbreaks in June and July threatens to weaken the economy.
The Fed added a new sentence to the statement it issued after each meeting: “The path of the economy will depend significantly on the course of the virus.”
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