Economy

Fed's Powell says full economic recovery may require coronavirus vaccine

Fed's Powell says full economic recovery may require coronavirus vaccine”

In his "60 Minutes" appearance, broadcast and streamed into millions of American homes, Mr. Powell reiterated that shepherding the economy through the darkest days of the coronavirus lockdown may require more policy action and suggested the recovery would not be seamless.

In an interview with CBS's "60 Minutes", Powell noted that the economy was fundamentally healthy before the virus struck suddenly and forced widespread business shutdowns and tens of millions of layoffs.

Beyond the dismal figures, "what we're really looking at is getting the medical data", he said, which is critical to determining when economic activity can resume.

"If we let people be out of work for long periods of time, if we let businesses fail unnecessarily, waves of them, there'll be longer-term damage to the economy".

Federal Reserve Chair Jerome Powell expressed optimism Sunday that the USA economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave.

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The central bank has taken extraordinary measures to rescue the economy since the pandemic began sweeping through the country - slashing interest rates to zero, rolling out trillions of dollars in lending programs for financial markets, and taking the unprecedented step of bailing out state and city governments. "And it's going to take a while for us to get back", said Powell. He said that he expected "a couple more months" of job losses and acknowledged that the unemployment rate, which hit 14.7 percent in April, could peak at 20 percent or even 25 percent.

"We will start our recovery and get on that road, and that'll be a good thing".

As Congress debates possible further economic relief, Powell has stretched the limits of typical central bank commentary, directly calling for more fiscal spending. "There's a lot more we can do to support the economy, and we're committed to doing everything we can as long as we need to".

If necessary, Powell said, the Fed could expand any of the nine emergency lending programs it has launched since the viral outbreak began to harm the economy - or create new ones. "We really don't know".



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