Economy

Powell: US recovery could take till end of 2021

Powell: US recovery could take till end of 2021”

Federal Reserve chairman Jerome Powell , speaking on ' 60 Minutes ,' said an economic recovery could take as long as another year and a half, but he said he believes the economy could begin recovering as early as the second half of this year.

Powell said the Fed could deploy new lending programs beyond the arsenal of facilities that it has opened up since the COVID-19 crisis began.

From a fundamental perspective, Monday's surge appears to have been triggered by warnings out of the Federal Reserve about potential asset price declines if the coronavirus "pandemic takes an unexpected course, the economic fallout prove adverse, or financial system strains reemerge".

Data show more than 30 million jobs were destroyed in the USA, as businesses were shuttered nationwide amid the efforts to stop the spread of the virus.

Powell said the nation's gross domestic product would contrast at an annualized rate of almost 30% between April and June, and the unemployment rate go up to almost 25%, although he stressed "the thing that matters more than anything else is the medical metrics. the real time economic data that we're seeing is just a function of how successful the social distancing measures are".

The US unemployment rate during the Great Depression in the 1930s is estimated to have been around about 25 percent at its height.

"I think there's a good chance that there'll be positive growth in the third quarter", Powell later said.

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But he warned it may take time to return to normal and the U.S. may not see a full recovery without a vaccine to treat Covid-19.

'In the long run, and even in the medium run, you wouldn't want to bet against the American economy, ' he said. Unemployment will get back down.

Mr Powell told CBS that comparisons to the Depression were not really justified, but said the recovery "could stretch through the end of next year". "We really don't know".

Asked about the need for a vaccine to treat the illness and put a stop to the coronavirus pandemic, Powell stressed the importance of consumers to the economy.

"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.

"If we are thoughtful and careful about how we reopen the economy so that people take these social distancing measures forward and try to do what we cannot to have another outbreak.then the recovery can begin fairly soon", Powell said.

The US economy is going through an unprecedented recession and a recovery will take time.



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