As U.S. Prospects Brighten, Fed’s Powell Sees Risk in Global Vaccination Pace

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Some countries are lagging behind in vaccinations, and policymakers warned that no economy is secure until the world is safe from coronavirus variants.

Jerome H. Powell, the Federal Reserve chair, and the managing director of the International Monetary Fund, Kristalina Georgieva, emphasized the economic need for worldwide vaccinations on Thursday.Pool photo by Stefani Reynolds

Jerome H. Powell, the Federal Reserve chair, stressed on Thursday that even as economic prospects look brighter in the United States, getting the world vaccinated and controlling the coronavirus pandemic remain critical to the global outlook.

“Viruses are no respecters of borders,” Mr. Powell said while speaking on an International Monetary Fund panel. “Until the world, really, is vaccinated, we’re all going to be at risk of new mutations and we won’t be able to really resume activity with confidence all around the world.”

While some advanced economies, including the United States, are moving quickly toward widespread vaccination, many emerging market countries lag far behind: Some have administered as little as one dose per 1,000 residents.

Mr. Powell joined a chorus of global policy officials in emphasizing how important it is that all nations — not just the richest ones — are able to widely protect against the coronavirus. Kristalina Georgieva, the managing director of the International Monetary Fund, said policymakers needed to remain focused on public health as the key policy priority.

“This year, next year, vaccine policy is economic policy,” Ms. Georgieva said, speaking on the same panel as Mr. Powell. “It is even higher priority than the traditional tools of fiscal and monetary policy. Why? Without it we cannot turn the fate of the world economy around.”

Still, she also warned against pulling back on monetary policy support prematurely, saying that clear communication from the United States is helpful and important. The Fed is arguably the world’s most critical central bank thanks to the widely used dollar, and unexpected policy changes in the United States can roil global markets and make it harder for less developed economies to recover.

“Premature withdrawal of support can cut the recovery short,” she cautioned.

The Fed has held interest rates near zero since March 2020 and