Fed Still Taking 'All-In' Approach To Economic Recovery: Powell

The SPDR S&P 500 SPY recovered from early losses on Friday and traded higher by 0.2% after the Wall Street Journal published an op-ed by Federal Reserve Chair Jerome Powell.

Powell’s Words: In the story, Powell said the Fed remains committed to an “all-in” approach to getting the U.S. economy back to full strength following the pandemic.

Related Link: Fed Maintains Interest Rates, Says Inflation Still 'Below 2%': What Investors Need To Know

“Today the situation is much improved,” Powell said, noting that half the 20 million jobs lost during the shutdown have already been regained.

“But the recovery is far from complete, so at the Fed we will continue to provide the economy with the support that it needs for as long as it takes,” he said.

Banking Rule Change: The op-ed comes the same day bank stocks took a hit when the Fed opted to allow a pandemic-era rule relaxing bank capital requirements to lapse at the end of March. Starting on April 1, U.S. banks will once again have to adhere to pre-pandemic requirements for supplementary leverage ratios.

In a press release, the Fed said it will “take appropriate actions to assure that any changes to the SLR do not erode the overall strength of bank capital requirements.”

Shares of big bank stocks Bank of America Corp BAC, Wells Fargo & Co WFC, Citigroup Inc C and JPMorgan Chase & Co. JPM all traded lower on Friday following the news.

On Wednesday, the Fed opted to maintain its target fed funds rate range of between zero and 0.25%. The Fed also said inflation “continues to run below 2%,” but raised its projection for full-year 2021 PCE inflation from 1.8% to 2.4%.

Benzinga’s Take: The Fed’s monetary policy measures up to this point have helped maintain stability in the credit markets, boosted the stock market to new all-time highs and brought back 10 million jobs lost to the pandemic.

Yet there’s still a long way to go before the economy is at full health, and the potential negative fallout from the government’s unprecedented stimulus measures may take years to play out.