The following is an uncut transcript ofwith Federal Reserve Chairman Jerome Powell.
SCOTT PELLEY: Is the economy still in jeopardy?
JEROME POWELL: Well, I would say this. So the economy slowed quite a bit over the winter due to the spike in COVID cases. But what we're seeing now is really an economy that seems to be at an inflection point. And that's because of widespread vaccination and strong fiscal support, strong monetary policy support.
We feel like we're at a place where the economy's about to start growing much more quickly and job creation coming in much more quickly. So that's really where we are. Really though, your question goes to the risks. And there are still certainly risks, as there always are.
And I would identify the principal risk to our economy right now really is that the disease would spread again more quickly. We do see cases. They're at a much lower level. But we see them moving up now. And that's troubling. It's going to be smart if people can continue to socially distance and wear masks.
SCOTT PELLEY: But we have the vaccine. And you seem to be saying, not about COVID, but about the economy, that we're out of the woods.
JEROME POWELL: Well, I'd say that we and a lot of private sector forecasters see strong growth and strong job creation starting right now. So really, the outlook has brightened substantially. And that's the base case. I would say again though, there really are risks out there. And the principal one just is that we will reopen too quickly, people will too quickly return to their old practices, and we'll see another spike in cases. I think with vaccination, it shouldn't have the kind of effect that the other spikes have had. And the economy should move ahead. But it can move ahead more quickly to the extent we keep the spread of COVID under control.
SCOTT PELLEY: It seems like everywhere I go now, I see a closed storefront next to a business with a "Help Wanted" sign. Can you explain this recovery to me?
JEROME POWELL: Yes. It's just a very unusual recovery. There are really disparate outcomes within countries and between countries. And so in our country, what you're seeing is some parts of the economy are doing very well, have fully recovered, have even more than fully recovered in some cases. And some parts haven't recovered very much at all yet. And those tend to be the ones that involve direct contact with the public. Travel, entertainment, restaurants, things like that. So you do see real disparities between different parts of the economy. It's sort of unusual for an economy like ours.
SCOTT PELLEY: I met a woman recently, Courtney Yoder, who was working full-time but still living in a tent. And then COVID came along and she lost her restaurant job. When does she and everyone else like her get their jobs back?
JEROME POWELL: You know, there are something like 8.5 million, 9 million people, maybe even more than that depending on how you count it, who were working in February of last year before the pandemic and have lost their jobs. So there're a lot of people out there who need to get back to work. And it's going to take some time. The good news is that we're starting to make progress now. The numbers show that people are returning to restaurants now. So the woman that you met will find that restaurants are going to be hiring again.
New restaurants will be started to replace some of the ones that went out of business. But I think we need to keep in mind, we're not going to forget those people who were left on the beach really without jobs as this expansion continues. We're going to continue to support the economy until recovery is really complete.
SCOTT PELLEY: The Federal Reserve will continue its support of the economy until those people, lower income Americans, are finding their jobs again?
JEROME POWELL: Yes. I mean it's an interesting, really different from a lot of other recoveries. The unemployment rate-- among people in the bottom 20% let's say quartile of incomes is still 20%, in the range of 20% unemployment for those people. Those are the people who lost their jobs. They were working in service industries with a lot of contact with the public, relatively low paid, relatively little in the way of savings. And, you know, those are the people who are vulnerable. We should see them start going back to work much faster now. But I think we need to stick with those people and support them as they try to get back to where they were in life, which was working. They were in jobs just a year ago.
SCOTT PELLEY: And most of those people in those kinds of jobs are women and minorities.
JEROME POWELL: Women and minorities way over-represented in those groups. That's right.
SCOTT PELLEY: You have people living in tents about a block from here. Have you seen them?
JEROME POWELL: Yes, I have. Yes, I can tell you exactly where they are. I see them coming to and from work regularly. They've been there in good times and bad times. But, you know, we've got to keep in mind that, even though parts of the economy are-- are back to where they were, there are still, you know, more than 20 people (SIC) who are going to food banks or other sources of free food.
As I mentioned-- very high unemployment among low paid workers. There are people who've lost their homes. There's a lot of suffering out there still. And I think it's important that, just as a country, we stay and help those people. They're going to need help. The economy that we're going back to is going to be different from the one that we had. And in some ways, those differences will make it challenging for those people to go back to work. And I think we owe them helping them get back to work.
SCOTT PELLEY: When you see those tents a block from here on your drive into work, what do you tell yourself?
JEROME POWELL: Well, it tells me that we don't have the answer to everything. But the job that we do for the benefit of the public is incredibly important. And we do understand that, you know, if we get things right, we can really help people. And that's what we're trying to do. So I do think about those people. We focus on -- if the people who are at the margins of the economy are doing well, then the rest of it will take care of itself.
SCOTT PELLEY: In this snapshot in time, what are your projections for growth and employment?
JEROME POWELL: Let me talk about sort of broader -- you don't want to look at any one forecast. So let me just say, if you look at what private sector forecasters are saying or what forecasters who sit around this table who are on the Federal Open Market Committee, our rate setting committee, what they're forecasting is growth for this year in the range of 6% or 7%, which would be the highest level in, you know, 30 years. Or even maybe a little bit higher. And forecasting unemployment to move down substantially from 6%, where it is now, maybe to between 4% and 5%.
As important as that, a very large number of people have left the labor force and are not counted as unemployment. We need to see those people coming back into the labor force and we want to see those numbers-- labor force participation, moving back up. We see all of those things beginning to happen much more quickly, starting right about now as vaccination kicks in, as people start to go back to their lives, and as the fiscal support that Congress has provided consistently since last year continues to support more activity.
SCOTT PELLEY: It seems like you're not expecting a recovery, you're expecting a boom.
JEROME POWELL: Well, I would say that this growth that we're expecting in the second half of this year is going to be very strong. And job creation, I would expect to be very strong. We had just about a million jobs created last month, if you include revisions upward for January and February. And I would think we would like to see a string of months like that and make quick progress back to maximum employment. That is certainly in the range of possibility. As I always have to point out, there are risks to that forecast. But I think that's the base case forecast that we have. And by the way, many others have as well.
SCOTT PELLEY: So when does the Fed start tapping the brake in terms of raising interest rates and trying to cool things off?
JEROME POWELL: So what we've said is that we'd consider raising rates when the labor market recovery is essentially complete and we're back to maximum employment and inflation is back to our 2% goal and is on track to move above 2% for some time. It'll be a while until we get to that place. But that's the guidance that we've offered to the public of the conditions we'd want to see before we start raising interest rates.
SCOTT PELLEY: What the Fed has done traditionally is use economic models to predict inflation and then raise interest rates, tap the brake if you will, before inflation happens. Is that what you're planning on doing?
JEROME POWELL: No, it's not. And really, what we've done is we've updated our understanding of the economy and therefore, our policy framework to the way the economy has evolved. The economy has changed. And what we saw in the last couple of cycles is that inflation never really moved up as unemployment went down.
We had 3.5% unemployment, which is a 50-year low for much of the last two years before the pandemic. And inflation didn't really react much. That's not the economy we had 30 years ago. That's the economy we have now. That means that we can afford to wait to see actual inflation appear before we raise interest rates. Now, we don't want inflation to go up materially above 2% and go back to, you know, the bad, old inflation days that we had when you and I were in college back a long time ago. But at the same time, we do have the ability to wait to see real inflation. And that's what we plan on doing.
SCOTT PELLEY: So you're going to wait for actual inflation up to about 2%. And when it hits 2%, how patient are you going to be?
JEROME POWELL: Well, what we said was we want to see inflation move up to 2%. And we mean that on a sustainable basis. We don't mean just tap the base once. But then we'd also like to see it on track to move moderately above 2% for some time. And the reason for that is we want inflation to average 2% over time. Inflation has been below 2%. We want it to be just moderately above 2%. So that's what we're looking for. That's the situation we're looking for. And when we get that, that's when we'll raise interest rates.
SCOTT PELLEY: You raise an interesting point. Whatever happened to inflation? It seems about 1981 it took a nosedive. And now, we have an entire generation of Americans who've never seen rapidly increasing interest rates or prices.
JEROME POWELL: That's right. That's one thing that's so interesting about the economy is that it's ever-changing. You know, it's not like water that always boils at 212° Fahrenheit. The economy that we had during the inflation years was one in which, when unemployment went to a low level, inflation would move up and it would stay up.
And it was very difficult to understand how to get inflation under control. And as you will remember, it was the single biggest economic problem of that era. So what happened was Paul Volcker and others came around this table and they broke the inflation psychology by raising rates and holding the economy back until people understood and believed that inflation would be much lower than that. Alan Greenspan in a way moved us further along. And so we've had inflationary psychology so that inflation is low and stable.
In addition though, the economy has changed because the globalization of the economy and technology have enabled manufacturing to take place all around the world. It's very hard for people in wealthy countries to raise prices or to raise wages. It's hard for workers to raise wages when wages can move overseas. So it's just a different economy. And one manifestation of it, if you look around the world in other wealthy countries, they're all experiencing very low inflation and really have for the last quarter of a century.
SCOTT PELLEY: But can the United States spend trillions on COVID relief and trillions more on infrastructure and social programs without setting a match to inflation?
JEROME POWELL: So let me first say that we're not responsible for fiscal policy and we're reluctant to offer advice to Congress, which after all created us and has oversight over us. But so what we've seen is we've been through times with very large fiscal deficits recently. For example, right after the global financial crisis. And inflation didn't really react to that.
If you go back to the 1960s and '70s, then fiscal policy was a big driver of inflation and deficits were possibly. There are a lot of theories on that. But you don't really see that now. Ultimately, can we afford to spend the money?
I would say it this way. The U.S. federal budget is on an unsustainable path. Meaning the debt is growing faster than the economy. And that's kind of unsustainable in the long run. That doesn't mean debt is at an unsustainable level today. It's not. We can service the debt we have. We can service the debt we're issuing. And that will remain the case for the foreseeable future. But we'll have to return to a sustainable path. The time to do that is when the economy is strong and we're fully recovered and people are working and taxes are rolling in. The time to do that is not now.
SCOTT PELLEY: Knowing what we know now, what do you think would've happened to the economy if the COVID Relief Bills had never passed?
JEROME POWELL: You know, I hate to even think. It would've been so much worse. This is a very unusual downturn in a way. Typically there's something wrong in the economy and the economy slows down on its own. This was a very strong economy that was hit by an external force. And tens of millions of people lost their income overnight. You know, we don't have tools to deal with that. Congress, in effect, replaced people's income. Kept incomes. Kept them in their homes, kept them solvent, kept their lives together with what they did in the CARES Act.
It was heroic. And it really made the difference. What Congress did with the CARES Act really made the difference. It passed in late March within less than a month of the pandemic arriving. And it passed unanimously. And it was by far the largest rescue bill since World War II. So I think historically, it will be-- it will be a big feature of the landscape when people look back.
SCOTT PELLEY: Would you advocate another round?
JEROME POWELL: It's really in the hands of Congress now. I think we're back to a place where the economy's recovering quickly. And, you know, we can do our jobs and not help Congress do theirs.
SCOTT PELLEY: The Chinese last month unveiled the world's first digital currency from a major power, currency that would not be printed, but would exist only in cyberspace on your phone, for example. Is the Fed working on a digital dollar?
JEROME POWELL: So China's been working on a digital currency for seven or eight years now. We are actually evaluating that. Most major countries are now looking at the possibility of having digital currency. And really asking the question—in our very modern, advanced economy with a fast, efficient, full-blown payment system, would adding a digital currency, a form of digital currency, would it actually benefit the public that we serve?
That's the question that we're asking. We're working very hard on that. We're also doing quite a lot of technological experiment. I mean, technology has made this a possible thing. And so we feel it's our obligation to understand it. How would it work? What would the features of it be?
There are many subtle and difficult policy choices and design choices that you have to make. We're doing all that work. We have not made a decision to do this because, again, the question is will this benefit the people that we serve? And we need to answer that question well. And we need to involve the public and Congress deeply in that process because it would be an important step if we were to do this.
SCOTT PELLEY: But given the fact that the final decision hasn't been made, you are doing, if I understand you correctly, software development, even graphic design, on what a digital dollar would look like and act like?
JEROME POWELL: Yes. We're doing lots and lots of work. We're doing stuff jointly with other central banks. We're doing things at the Boston Fed and many of the regional Feds have little projects going on. Here at the Board, we have a group of people who are doing different software development and that kind of thing. It's a very, very large, complex project. And, you know, this is really just table stakes. This is understanding the technology and the possibilities so that you can really address the policy issues.
We are the world's reserve currency. Meaning that people use dollars even if they have no connection to the United States. They use dollars to pay for things all over the world. So we're in a great place with our currency. And as I mentioned, we have a highly evolved payment system. Really, the question is would adding a digital dollar, would it benefit our citizens and the people that we serve? And we don't have an answer to that question yet.
SCOTT PELLEY: You think it's likely?
JEROME POWELL: I think it's possible is all I would say. I think it's this very, very interesting, subtle, complex set of questions. You've seen many other countries like ours, well-off countries like ours, that are looking at it seriously. In some of those countries, the use of cash has declined precipitously. That is not the case here. Americans still like to use cash. So it's something that'll be decided based on the situation here in the United States.
SCOTT PELLEY: A private hedge fund called Archegos collapsed last month after borrowing billions from banks to make risky bets on stocks. Now the banks are out billions of dollars. How concerned are you that the financial system is blundering into the same kind of opaque, risky bets that led to the Great Recession in 2008?
JEROME POWELL: This is an event that we're monitoring very carefully and working with regulators here and around the world to understand carefully. And I would say a couple things. First, this incident doesn't really raise questions about the stability of the financial system or of those institutions, which are mostly foreign banks.
What's concerning about it though is--and surprisingly, frankly, is that a single customer, client, of one of these large firms could result in such substantial losses to these large firms in a business that is generally thought to present relatively well understood risks. So that is surprising and concerning. And, you know, we're going to understand that and get to the bottom of it. What we try to do is make sure that the banks understand the risks that they're running and have systems in place to manage them. This would appear to be a significant shortfall-- a failure on that front. And so that's something we're looking at.
SCOTT PELLEY: The chances of a systemic breakdown like in 2008 are what today?
JEROME POWELL: The chances that we would have a breakdown that looked anything like that where you had banks making terrible loans and investment decisions -- and having low levels of liquidity and weak capital positions, and thus needed a government bailout, the chances of that are very, very low. Very low.
But the world changes. The world evolves. And the risks change as well. And I would say that the risk that we keep our eyes on the most now is cyber risk. So you would worry about a cyber event. That's something that many, many government agencies, including the Fed and all large private businesses and all large private financial companies in particular, monitor very carefully, invest heavily in. And that's really where the risk I would say is now, rather than something that looked like the global financial crisis.
SCOTT PELLEY: Well, when you talk about cyber risk, what are you talking about? What kind of scenarios are you looking at?
JEROME POWELL: All different kinds. I mean, there are scenarios in which a large payment utility, for example, breaks down and the payment system can't work. Payments can't be completed. There are scenarios in which a large financial institution would lose the ability to track the payments that it's making and things like that. Things like that where you would have a part of the financial system come to a halt, or perhaps even a broad part.
And so we spend so much time and energy and money guarding against these things. There are cyber attacks every day on all major institutions now. And the government is working hard on that. So are all the private sector companies. There's a lot of effort going in to deal with those threats. That's a big part of the threat picture in today's world.
SCOTT PELLEY: How have we gotten away with not having a disaster like that?
JEROME POWELL: You know, I don't want to jinx us. I would just say we've worked very hard at it. A lot of us have worked very hard at this and invested a lot of time and money and thought. And worked collaborately (SIC) with our allies and with other government agencies. But there's never a feeling at any time that you've done enough or that you feel safe.
SCOTT PELLEY: You have been watching various market indices breaking records almost every day now. Is what's happening in the stock market today in your view rational or is it a speculative bubble?
JEROME POWELL: We take a little broader lens than that, if I may. And-that is we look after broader financial stability, which includes a bunch of things. How resilient is the financial system? How much capital? How much liquidity? How much risk management? Does it function in the face of significant shocks?
One other piece of it though, we do look at asset prices. And I would say, some asset prices are elevated by some historical metrics. Of course, there are people who think that the stock market is not over-valued, or it wouldn't be at this level.
We don't think we have the ability to identify asset bubbles perfectly. So what we focus on is having a strong financial system that's resilient to significant shocks, including if values were to go down.
SCOTT PELLEY: The securities industry has reported that $814 billion has been borrowed by people investing in the stock market, borrowed against their portfolios. That's a 49% increase over last year.
And the last time it grew that much was in 2007, before the Great Recession. And the time it grew that much before that was 1999, just before the dot com implosion. At what point does the Federal Reserve start to rein in this speculative bidding up of stock prices based on borrowed money?
JEROME POWELL: That sounds like margin debt. I don't know that statistic. I really can't react to that statistic. I would say the main thing that we do is we make sure that the financial institutions that we regulate and supervise understand the risks that they're running, manage them well, have lots of capital, lots of liquidity, and highly evolved risk management systems so that they do understand the risks they're running and have plans to deal with them. And that way, when there are shocks, for example, if there were to be a big market correction, you will see financial institutions that are strong enough to stand up to that. Not just private financial institutions, but also markets and things like that, payment utilities and things like that. That's really what we do.
SCOTT PELLEY: And you believe the system, because of the oversight of the Fed, has the wherewithal to stand a significant shock to the markets?
JEROME POWELL: Well, I think we saw that actually. Yes, I do believe that. We never say that the mission is accomplished. But I would say that if you look at how the banking system and the financial system-- most parts of the financial system made it through quite a stress test last year when we lost, you know, 25% of GDP and 30 million jobs in the space of a couple of months.
Now, some parts of the financial system had to be bailed out again. These were really though non-bank places like money market funds and things like that, where we had to step in again and provide liquidity. But ultimately, the work that we did in Dodd-Frank and in Basel to strengthen the banking system over the last decade, I think it showed up pretty well in what was a pretty good stress test.
SCOTT PELLEY: Near zero interest rates are with us for how long?
JEROME POWELL: Well we've said that we would look at raising interest rates when the labor market recovery is just about complete, when inflation is at 2% and on track to run moderately above 2% for some time. That's what we've said. I don't have a particular calendar date for that. But we would consider raising rates at that time.
SCOTT PELLEY: So all the way through the end of this year, you wouldn't see rates increasing?
JEROME POWELL: I think it's highly unlikely we would raise rates anything like this year, no.
SCOTT PELLEY: 2022?
JEROME POWELL: You know, I don't want to put a date on it. It really comes down to outcome-based guidance is what we call it. And it will not depend on the calendar. It will depend on the progress of the economy toward the goals that we've set, which are 2% inflation and maximum employment. When we get to that place and inflation is expected to run moderately above 2% for some time, then we'll look at raising interest rates. And that day will come.
SCOTT PELLEY: Is there anything in the economy that's flashing red?
JEROME POWELL: Flashing red? I really don't think so, no. I think there are always risks. I mentioned the risk of the spread of COVID. We're seeing more COVID cases again. Many parts of the country, as you know, are reopening with enthusiasm. And time is going to tell whether that was premature. But we do see cases moving up again. Not at a high level, but you wouldn't want to see them moving back up. You'd want to see them flat or continuing to decline. They're at much lower levels than they were in the winter. Vaccination is helping, but that's I think the main risk to the speed of the recovery.
SCOTT PELLEY: How have your first few months with President Biden been different than your years with Donald Trump?
JEROME POWELL: You know, I'm reluctant to comment-- even indirectly -- on elected politicians. That's a practice I've kept to and I've never regretted it.
SCOTT PELLEY: Is your job easier now under the current administration?
JEROME POWELL: My job is the same, really. I'm serving the American people, trying to achieve-- the goals that we have with the tools that we have. We're seeking to achieve maximum employment and price stability and look out for the stability of the financial system. We always do that without regard to politics or external political forces. I'm fortunate to work with terrific people here at the Fed who are highly motivated, highly capable and just dedicated to the service we're lucky to give to the public. And that's what we're focused on.
SCOTT PELLEY: You are more than three years into a four-year term. Would you like to keep doing this?
JEROME POWELL: My focus is every day on, you know, doing the best job I can. For as long as I have this job, that's what I want to do. I want to do the very best I can to serve the public that we all serve. And I really focus exclusively on that.
SCOTT PELLEY: You didn't say no.
JEROME POWELL: I said that-I focus exclusively on doing the best job I can for the public.
SCOTT PELLEY: What would you like the American people to know about the Federal Reserve at this point in our economy?
JEROME POWELL: I think we've been through an extraordinarily difficult time. 2020 was a very difficult year for so many different reasons. And now, we find ourselves really at an inflection point where the economy, we think, is going to start to recover much more quickly. And it's a real tribute to the innovation and the determination of the American people to get through this so well. Congress did a great job-- as well.
I would leave you with an optimistic note, if I may. And that is we've been through really difficult times as a country so many times. And in every case, without exception, we come out stronger on the other side. I think we will come out of this. I'm highly confident we'll come through this-- with a better and more inclusive economy.
SCOTT PELLEY: You mentioned the money market funds a few minutes ago. Many people invest in the money market funds. They froze up during COVID. They froze up in 2008 during the Great Recession. Is there something fundamentally broken about that market?
JEROME POWELL: There's a structural issue. And we know this. And it really is time to address it decisively. And that just is sometimes there arises a situation where people want to take their money out and it's difficult for money market funds to turn their assets into cash quickly enough. And so what's had to happen twice is the Fed came in and became a source of liquidity for money market funds. So after the global financial crisis when it happened the first time, we did some reforms. Those reforms worked a little bit, but they didn't really do the job because once again, this time we had to step in and provide liquidity on behalf of the government to bail out these private businesses.
And, you know, when something's happened twice, it really is time to go ahead and fix it. Every private business ought to have the ability to deal with a range of plausible things that might happen to it. And that's true of money market funds as it is for other businesses.
SCOTT PELLEY: How do you fix it?
JEROME POWELL: I just think there're many ideas that are out there. And they're all under discussion-- by the way, internationally as well. Essentially, what it boils down to is that money market funds are going to need to be resilient enough so if they have a liquidity shock like this, they can handle it.
SCOTT PELLEY: Will corporate and personal tax increases slow growth?
JEROME POWELL: That is a good question for the fiscal authorities. As you know, we are a non-political, nonpartisan agency. We serve all Americans. And we try to stay out of the business of elected politicians to the maximum extent possible.
SCOTT PELLEY: Archegos was able to invest only about 15% of its own money in all these stocks that it was buying. And that was made possible by the banks through something called total return swaps. Is it time for the Fed to regulate that derivative?
JEROME POWELL: So those derivatives are already regulated, in effect. It's the kind of thing where we would expect those banks to know what they're doing. It's a fairly common instrument. And we would expect banks to understand the risks that they're running.
I think what really happened is that they did understand the risks that they were running. What they didn't understand was that this one investor was doing the same thing with five or six prime brokers around New York. And that when it came time to liquidate positions, it was six firms or so trying to liquidate positions. So there wasn't enough liquidity. So it was a risk management breakdown and one that we're looking very carefully at to try to make sure it doesn't happen again.
SCOTT PELLEY: One that you do not expect to see repeated?
JEROME POWELL: I would say that we're determined to understand what happened and make sure that whatever happened doesn't happen again.
SCOTT PELLEY: Just a couple more here. Mr. Chairman, when you say the Fed is going to continue to support the economy, what do you mean?
JEROME POWELL: Well, what we can do with our tools is we can provide accommodative financial conditions. And that just means low interest rates and broader financial conditions that are supportive of economic growth. So companies can borrow, households can borrow, credit is available. And people can buy things and houses can be bought. That sort of thing. All of the tools that we have enable economic growth by making financial conditions supportive of growth. And that's really what we can and will do.
SCOTT PELLEY: Getting back to your inflation target, why 2%? Why is that the magic number?
JEROME POWELL: Two percent is what central banks around the world came to, you know, over the last really 40 years. It is the standard that all banks target. And you may really be asking, "Why not zero?" And the reason is that interest rates--every interest rate-- includes an estimate of future inflation. So if you're lending money, you're going to get paid for future inflation. You're also going to have a real return. And if inflation were to be zero rather than 2%, then interest rates would be 2% lower, by definition. And what that would mean is that central banks, including the Fed, we've have much less room to cut rates and support the economy-- when the economy turns down.
And so we've seen that. As inflation and rates have moved down, we've seen central banks have less ability to support the economy. That means worse economic outcomes. It means lower growth. And we see a number of central banks around the world that really have a hard time getting inflation up to 2% and have much less ability to support their economies. We don't want that to happen here. And that's why we want inflation that really is at 2%.
SCOTT PELLEY: To follow up on our conversation about the digital dollar, are you considering a digital dollar in order to compete with the crypto currencies that are out there already like Bitcoin?
JEROME POWELL: That's not the principal reason, I wouldn't say. It is a fact that there are private sector-- currencies, stable coins and crypto-currencies as well. Those are not at a level or a scale that is concerning at this point.
Really, the fundamental question for us is if we add this new digital currency to trusted money that we're counted on to provide to the public, will that help the public? Will the public be better off? And will there be any negatives too? Will that have perhaps unexpected effects in other parts of the financial system that we need to consider in weighing the costs and benefits of this? We're the world's reserve currency. The dollar is so important. We need to get this right. We do not need to be the first ones to do this. We want to get it right. And that's what we're going to do.
SCOTT PELLEY: At this moment in time, what's the best guarantee that you can make to the American people?
JEROME POWELL: Well, I'm in a position to guarantee that the Fed will do everything we can to support the economy for as long as it takes to complete the recovery.
SCOTT PELLEY: I looked back at our last interview almost a year ago, and what struck me was how little was known about what was going to happen with Covid or the economy.
JEROME POWELL: You know, the level of uncertainty was really frightening. We did not know how the economy would perform. We did not know the path of the disease. We had no idea when-- how long it would take to do a vaccine. So I think if you look back a year ago to when we last spoke, the economy's actually performed better than we had feared. Substantially better. And part of that just is what Congress did with the CARES Act, what we did and what the people in the private sector did. And then at the end of the year we got--vaccines and they're now in wide distribution, so really--the economy has done better than expected.
The other side of that, though, is if you told me at this time last year that 550,000 plus people and counting would die of Covid-19, I would have been shocked. I think the numbers we were hearing from experts and kicking around at that time were substantially lower. And it's a lot of tragedy. It really is. And we don't want to forget that.
SCOTT PELLEY: More than half a million Americans dead.
JEROME POWELL: Yeah.
SCOTT PELLEY: More than died in World War II, Korea, Vietnam, Iraq and Afghanistan all added together. And yet, people have been clamoring to open the economy. What does that tell you about the American tolerance for death?
JEROME POWELL: I would just say people are really eager to get back to their regular lives. Many of the people who did die were vulnerable, either older or with preexisting conditions and things like that. People are very eager to get back to the way life was before. And I would just say if we can just be a little bit patient, we can avoid another spike. We can avoid unnecessary deaths. And the economy will recover more quickly as well. So it's a win-win-win thing. And I do hope that we can do that.
SCOTT PELLEY: In those darker days a year ago, your economists at the Fed, your advisors here at the Fed came in and painted what scenario for you?
JEROME POWELL: So again, it was tremendous uncertainty. That, you know, there was always a possibility that it would be better than we thought. But there was a possibility that the economy would really struggle. Remember that all around the world people voluntarily shut down major economies in significant part at the same time. Simultaneously.
No one's ever done that before. So what would happen? How would you get the living thing that is the economy going again? Would it just stand up and start running again? We didn't know. We really didn't know. And there was a real possibility if Congress hadn't acted as vigorously as they did, there was a real possibility that the economy would struggle. And that these job losses that we had, you know, 30 million people out of work, that they would become longer term. That people would lose their connection to the labor force. That there would be long-lasting damage to our economy and to the lives of our people.
I'm happy to say that that really hasn't happened anything like to the extent we were afraid of.
SCOTT PELLEY: Did you think at that time that you could be looking at a Great Depression scenario?
JEROME POWELL: You know, that was something we talked about. It was-- we didn't think that was a likely outcome. I never thought that was a likely outcome. But it was around the edges of the conversation. And, you know, we were very eager to do everything we could to avoid that, of course.
SCOTT PELLEY: Are you surprised the economy snapped back the way it has?
JEROME POWELL: Yes, the performance of the economy, even before we had a vaccine was surprising to I want to say almost all economic forecasters, beginning with the job report from May of last year. And then right through, really right through the summer you saw very high levels of people going back to work and returning to their work lives. And then in the winter, what you saw was a Covid spike as people went back indoors, and now with vaccination you're seeing the resumption of what appears to be a very strong expansion.
SCOTT PELLEY: Thank you again.
(WALK AND TALK INSIDE FEDERAL RESERVE BOARD BUILDING)
SCOTT PELLEY: Is this the recovery that you were expecting?
JEROME POWELL: You know, it's hard to go back and remember. But, I would say-- the recovery's been better, consistently better than I'd expected.
SCOTT PELLEY: I mean, you have to be surprised.
JEROME POWELL: Yes, well I think most forecasters were expecting a slower and longer path to really get economic momentum. And we have seen, of course, with a lot of support from Congress and from us, it's been faster than expected.
SCOTT PELLEY: Would you say the COVID recession is behind us?
JEROME POWELL: I would say for many it is. We're seeing people go back to work. We've recovered a good chunk of the jobs we lost. But we've got to remember there's in the range of 10 million people who were working in February of 2020 and lost their jobs because of COVID-19. And they're still not working. So, for them, it's not over. And we're going to keep those people in mind.
SCOTT PELLEY: We're almost alone in this great old building, except for very few members of your staff and my crew as well. When are you going to have people here again?
JEROME POWELL: I hope sometime later this year. It's something we're looking at carefully now. We want to bring people back when it's safe and when they've been vaccinated. We're just at that place in the Washington area where people are starting to get vaccinated, including younger people. And I think in a couple of months, we'll have a clearer picture on that.
SCOTT PELLEY: Have you been vaccinated?
JEROME POWELL: I have.
SCOTT PELLEY: Both doses?
JEROME POWELL: Yes, I have.
SCOTT PELLEY: How does that feel to you?
JEROME POWELL: It feels great, I have to say. It feels really great. You feel a great relief, I think, when it happens. And I certainly hope everyone gets vaccinated.
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