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Stimulus Checks

From which date is the US Federal Reserve stopping stimulus check payments?

The central bank has announced the tapering off of its support for the US economy, signalling the end of the Fed's covid-19 support.

Jerome Powell, head of the Fed, has announced that the bank's stimulus will be tapering off.
Kevin DietschEFE

As there are no plans for a fourth stimulus check, there has been no announcement on it ending. There has already been three stimulus checks, but they have been independent of the Federal Reserve. What the bank has done is prop up mortgages and businesses by pumping hundreds of billions of dollars in to the economy each month since the pandemic started.

However, the Fed has said they are beginning to taper off payments directly into the US economy, reducing the funding by $15 billion a month. On Wednesday that they would begin cutting that stimulus by $15bn a month but left interest rates unchanged.

Raise in interest rates put on hold by world banks

A raising of interest rates to counter inflation has long been expected to be implemented, but Powell says there are other factors in play that higher interest rates won't fix, such as the chaos in global supply chains. It anticipates this problem will persist until the second half of 2022.

"We don't think it is time yet to raise interest rates. There is still ground to cover to reach maximum employment," Fed chief Jerome Powell said, adding that he thought that goal could perhaps be met late next year. In the meantime, expect high prices on goods.

This stance has been echoed by other central banks like the Bank of England (BoE) and the European Central bank (ECB). The BoE said on Thursday that it would keep its interest rates at the same level while the ECB said it would not raise rates until April 2022. This follows previous pandemic planning to keep borrowing costs low to encourage people to spend. Countries in Europe are beginning to see cases of covid-19 rise, while the UK has not had cases out of the tens of thousands for months.

The Fed also counters that an increase in interests rates now would prevent people rejoining the US workforce, which is seeing higher than normal unemployment at the same time as a record number of job vacancies. Unemployment stands at 4.8 percent while there are more than 10 million vacant jobs.


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