Powell Warns US Recovery Could Stretch Through End of 2021

May 18, 2020by Alister Bull, Bloomberg News (TNS)
Federal Reserve Chairman Jerome Powell testifies on monetary policy before the House Financial Services Committee on Capitol Hill in Washington, D.C., on February 27, 2018. (Olivier Douliery/Abaca Press/TNS)

The U.S. economy will recover from the coronavirus pandemic, but the process could stretch through until the end of next year and depend on the delivery of a vaccine, said Federal Reserve Chairman Jerome Powell.

“Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,” the U.S. central bank chief said in an excerpt of an interview conducted Wednesday and aired on Sunday on CBS’ “Face the Nation” show.

“For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,” he said.

More than 36 million Americans have lost their jobs since February as the economy shuttered to limit virus spread. Countless companies, especially small businesses, are hurtling toward bankruptcy, while states and cities are confronting gaping budget shortfalls that could provoke a massive second wave of layoffs from the public sector.

The Fed chief said people should never “bet” against the American economy, but he took care not to promise a swift, so-called V-shaped rebound.

“This economy will recover. It may take a while,” he said. “It could stretch through the end of next year. We really don’t know.”

Powell’s full interview will be broadcast at 7 p.m. Eastern time on CBS’ “60 Minutes.”

Powell’s remarks follow his grave warning Wednesday that the U.S. economy faces lasting harm from the pandemic if the government doesn’t step up. The comments add support to calls for more congressional spending as Democrats push for a fresh $3 trillion in virus aid on top of a record $2.2 trillion package agreed in March. On Friday, the House passed the measure, though it has no future in the Republican-led Senate.

Powell can expect questions on the scale and timing of additional fiscal relief when he appears before the Senate Banking Committee on Tuesday. He’ll also be asked to tell Americans what to expect. For all his caution, the Fed chief also had a message of hope.

“I would just say this: In the long run, and even in the medium run, you would not want to bet against the American economy.”

———

©2020 Bloomberg News

Distributed by Tribune Content Agency, LLC.

Economy

McConnell to Support White House-Democrats Deal, If One Can be Struck
Political News
McConnell to Support White House-Democrats Deal, If One Can be Struck

WASHINGTON — Senate Majority Leader Mitch McConnell said Tuesday he’d support whatever agreement the Trump administration and congressional Democrats reach on a coronavirus relief package, even if he has “some problems with certain parts of it.” The Kentucky Republican, who is up for reelection in November,... Read More

'A Line in The Sand': Both Sides Dig in on Virus Relief Bill
Congress
'A Line in The Sand': Both Sides Dig in on Virus Relief Bill

WASHINGTON (AP) — Negotiators on a huge coronavirus relief bill reported slight progress after talks resumed in the Capitol, with issues like food for the poor and aid to schools struggling to reopen safely assuming a higher profile in the talks. Multiple obstacles remain, including an impasse on... Read More

Progress Slow on Virus Relief Bill as Negotiations Continue
Political News
Progress Slow on Virus Relief Bill as Negotiations Continue

WASHINGTON (AP) — Negotiators on a huge coronavirus relief bill reported slight progress after talks resumed in the Capitol, with issues like food for the poor and aid to schools struggling to reopen safely assuming a higher profile in the talks. Multiple obstacles remain, including an impasse on... Read More

Independent Restaurant Coalition Runs Ad to Support Congressional RESTAURANT Act
Business
Independent Restaurant Coalition Runs Ad to Support Congressional RESTAURANT Act
August 3, 2020
by Gracie Kreth

WASHINGTON - As Congress and the White House continue to negotiate another package of coronavirus relief, the Independent Restaurant Coalition is stepping up its effort to make sure they are included in the emergency funding this time around.  This week, the Coalition is running a television... Read More

Fed’s Kashkari Urges Congress to Act, Suggests Fresh Lockdown
Economy
Fed’s Kashkari Urges Congress to Act, Suggests Fresh Lockdown

The surging U.S. savings rate means the country can afford to support Americans laid off due to the coronavirus pandemic, while a “hard” lockdown could deliver a faster economic recovery, a senior Federal Reserve official said on Sunday. Federal Reserve Bank of Minneapolis President Neel Kashkari... Read More

White House and Congress Still Far From Agreement on Coronavirus Relief Bill
Political News
White House and Congress Still Far From Agreement on Coronavirus Relief Bill

WASHINGTON — As millions of Americans drifted toward financial crisis, the two parties remained deadlocked after weekend talks on another round of economic relief intended to ease the burden of job losses from the worsening coronavirus outbreak. Administration officials and Democratic congressional leaders spent hours Saturday... Read More

News From The Well
scroll top