Powell Says Pandemic Is Molding ‘Extraordinary Generation’

Federal Reserve Chair Jerome Powell predicted U.S. students who have been forced to cope with the Covid-19 pandemic will become an “extraordinary generation” that will mature faster and have a bigger impact on society.

Speaking and answering questions in a town hall meeting Tuesday with educators and students, Powell didn’t discuss the outlook for monetary policy or make specific comment on growth and the risks from the delta variant -- though he did flag that the pandemic is “still casting a shadow on economic activity.”

“This is an extraordinary time, and I believe that it will result in an extraordinary generation,” Powell said in his prepared remarks to the group. “You will see the world differently than your predecessors. You have been forced, sooner than most people, to consider what in life is truly important.”

Powell will have an opportunity next week to delve into the policy and economic outlook, when policy makers meet Aug. 26-28 at Jackson Hole, Wyoming, for the central bank’s most prominent annual conference.

“This is a historical inflection point, and this generation of students is in a position to turn its lessons into profound tools of change,” Powell said.

The Fed chair offered high praise to American teachers, who have had to restructure their teaching methods during Covid-19. “It is the highest call within the higher calling of public service.”

In the Q&A portion of the event, Powell also said:

  • The Covid pandemic continues to cast a shadow on economic activity. “It is still very much with us. We can’t declare victory yet on that.”
  • The pace of vaccinations in the U.S. has slowed, and one result is the spread of the delta strain. “Now we are falling behind” relative to other countries.
  • Former Fed Chair Paul Volcker may be the most distinguished person in the economic sphere “in my lifetime,” having vanquished super-high inflation in the early 1980s. He recommended Volcker’s “Keeping At It,” an autobiography.
  • While the Fed has powerful tools and is focused on helping to create a “broad and inclusive” economy, there are limits to what it can do. Fiscal policy is even more powerful and can be targeted.
  • Digital money is becoming more important, which is why central banks around the world are looking at creating digital currencies. “It is a very interesting and challenging question” the Fed is considering.

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