Federal Reserve Chair Jerome Powell said recent progress on finding a vaccine was good news in the medium term, but the U.S. economy still has a “long way to go” before it fully recovers from the pandemic.

“The Fed will stay here and be strongly committed to using all our tools” to support the economy, Powell told a virtual event Tuesday. “The next few months may be very challenging.”U.S. central bankers next meet Dec. 15-16.

Stocks hit record highs this week on the promise of vaccines against the coronavirus. While payrolls have recovered for six consecutive months, a resurgence in infections threatens to curtail activity and slow the recovery as millions of Americans remain out of work.

“The recovery is incomplete,” Powell said. “We have a long way to go.”

In a sign that Americans may be turning more cautious, retail sales rose in October at the slowest pace in six months, Commerce Department data released earlier on Tuesday showed. Weaker momentum in consumer spending -- which accounts for two-thirds of the economy -- means growth could slow following the third quarter’s record jump in gross domestic product.

With hopes for additional fiscal stimulus this year fading, Fed officials may debate providing additional stimulus next month to sustain the expansion.

Fed officials have cut the benchmark lending rate to nearly zero and are currently buying $120 billion of Treasury and agency mortgage-backed securities a month to keep longer-run borrowing costs low. They have also pledged to keep providing policy support to the economy until inflation measures achieve rates that are consistent with an average of 2 per cent over time.

The Fed chief also leaned toward keeping the Fed’s emergency lending facilities in place for now -- all but one of which are currently scheduled to expire at the end of the year.

“When the right time comes, and I don’t think that time is yet or very soon, we will put those tools away,” he said. “The recovery is incomplete.”

Pennsylvania Republican Senator Patrick Toomey is urging the Fed to close the facilities as markets continue to function. The Fed would need the Treasury secretary’s agreement to keep the facilities open. Treasury Secretary Steven Mnuchin has not made a decision about whether the facilities should be extended into next year, an agency spokesperson said.

In a sign that Americans may be turning more cautious, retail sales rose in October at the slowest pace in six months, Commerce Department data released earlier Tuesday showed. Weaker momentum in consumer spending -- which accounts for two-thirds of the economy -- means growth could slow following the third quarter’s record jump in gross domestic product.

With hopes for additional fiscal stimulus this year fading, Fed officials may debate providing additional stimulus next month to sustain the expansion. U.S. central bankers next meet Dec. 15-16.

Fed Vice Chair Richard Clarida said Monday that he was encouraged by the vaccine news and had “more conviction that the recovery from the pandemic shock in the U.S. can potentially be much more rapid than it was from the global financial crisis.”