Powell told reporters that the pace of recovery has moderated in recent months with the weakness concentrated in the sectors of economy most adversely affected by the resurgence of the virus and greater social distancing. 

“We have not won this yet. We haven't succeeded in doing this yet and we need to stay focused on it as a country and get there,” Powell said. 

“The path of the economy continues to depend significantly on the course of the virus. A resurgence in recent months in COVID-19 cases, hospitalisations and deaths is causing great hardships to millions of Americans and is weighing on economic activity and job creation,” he said. 

The overall recovery in economic activity since last spring is due in part to federal stimulus payments and expanded unemployment benefits, which have provided essential support to many families and individuals. 

The recently enacted Coronavirus Response and Relief Act will provide additional support, he added. 

“Overall, economic activity remains below its level before the pandemic and the path ahead remains highly uncertain. As with overall economic activity, the pace of improvement in the labour market has slowed in recent months,” Powell said. 

Powell noted that the economic downturn has not fallen equally on all Americans and those least able to shoulder the burden have been the hardest hit. In particular, the high level of joblessness has been especially severe for lower wage workers in the service sector, African Americans and Hispanics, he said, adding that the economic dislocation has upended many lives and created great uncertainty about the future. 

The pandemic, he said, has also left a significant imprint on inflation. 

Following large declines in the spring, consumer prices picked up over the summer but have levelled out more recently. For those sectors that have been most adversely affected by the pandemic, prices remain particularly soft. 

“We continue to expect it will be appropriate to maintain the current zero to one-quarter per cent target range for the federal funds rate until later market conditions have reached levels consistent with the committee's assessment of maximum employment and inflation has risen to two per cent and is on track to moderately exceed two per cent for some time,” Powell said. 

In addition, the Fed will continue to increase holdings of Treasury securities by at least US80 billion per month and of agency mortgage backed securities by at least USD40 billion per month until substantial further progress has been made toward our maximum employment and price stability goals, he said.