“We may be in recession”: Fed Chairman Jerome Powell says the corona virus dictates the reopening of the economy
Federal Reserve President Jerome Powell acknowledged on Thursday that the United States “may be in recession” and said the corona virus should dictate when the economy opens up again for business.
“We may be in a recession,” Powell said in a rare television interview.
“I would like to point out the difference between this and a normal recession,” he told NBC’s “Today Show.” “This is not something wrong with the economy. This is a situation where people are asked to step back from economic activity, shut down their businesses, stay home from work, so if we get the virus under control fairly quickly, economic activity can resume. And we want to make that recovery as powerful as possible. ‘
His appearance comes after the Senate passed a $ 2 trillion bill designed to boost the economy through loans to small businesses, direct controls to Americans, and aid to industries hit hard by the virus.
Federal Reserve President Jerome Powell acknowledged that the United States may “be in recession”
Federal Reserve President Jerome Powell also ignored the criticisms he and the central bank received from President Donald Trump
There are more than 68,000 cases of the coronavirus in the United States, and more than 1,000 people have died.
President Donald Trump has used an Easter deadline – which is April 12 – for US companies to resume normal business and facilitate social distance guidelines designed to stop the spread of the virus.
But Powell wouldn’t commit to a date when asked. He advised listening to medical experts – such as Dr. Tony Fauci – and said the coronavirus would dictate when the economy opened again.
“We’re not pandemic experts here, we can’t make that decision,” Powell said. “I would say you know we tend to listen to the experts. Dr. Fauci said something like the virus is going to set the timetable and that sounds good to me. ‘
He added, “I think the first step will be to control the spread of the virus and then resume economic activity.”
Powell admitted he looks to the second half of the year to see the economy return.
“The sooner we get through this period and get the virus under control, the faster the recovery can take place,” he said. “I would expect economic activity to resume and rise again in the second half of the year, very difficult to say exactly when that will be and it will really depend on the spread of the virus. The virus is going to dictate the timetable here. ‘
President Trump seemed to be withdrawing on Easter deadline on Wednesday, saying he would not make a hasty decision and consult with Fauci, the director of the National Institute of Allergy and Infectious Diseases, and Dr. Deborah Birx, who coordinates the daily business. day response to the coronavirus.
Fauci warned on Wednesday that a second cycle of the virus could come.
“Could this possibly be a seasonal, cyclical thing? I think it could be very good, ”he said during the daily briefing on the corona virus in the White House.
President Trump, meanwhile, warned he wouldn’t do anything “brash” to reopen the economy.
“I’m not going to rush or rush,” he said during his daily White House press briefing.
Trump has been a vocal and fierce critic of Powell and the Fed. He has complained repeatedly and publicly – in interviews and on his Twitter account – when he thinks the central bank isn’t cutting interest rates fast enough to kick-start the U.S. economy.
Powell shrugged off that criticism, saying the fed “won’t let anything else get into our minds.”
“My colleagues and I here are fully focused on our mission to serve the American people. We know that what we do is important to all Americans. And we are trying our very best to serve them in a way that is completely non-political and non-partisan, ”he said.
“We don’t let anything else come to mind and I think, you know, it always works like that. We have a very strong culture. That’s deep in our DNA and that’s exactly how it ‘always will be,’ he added.
Last week, the Federal Reserve cut interest rates to almost zero to try to stimulate economic growth.
“This is a unique situation,” said Powell. “At some point, we get the spread of the virus under control. And then confidence returns, companies open again, people return to work. ‘
Dr. Anthony Fauci, director of the National Institute of Allergy and Infectious Diseases, gave a grim warning that the coronavirus could return in cycles as the death toll in the U.S. reached 1035
The stock market has been fueled in the aftermath of the corona virus. Numerous states have closed restaurants, gyms, bars, and clubs. The catering industry has been hit hard by the pandemic. States like California and New York have advised people to stay at home as much as possible.
Some experts have predicted unemployment to reach 20 percent or 30 percent.
So far a record 3.3. million people applied for unemployment benefits last week.
Powell acknowledged that “significant” unemployment increases were on the horizon, but argued that this would disappear when the virus was under control.
“You may see, you know, a significant rise in unemployment, a significant drop in economic activity,” he said. “But there could also be a good upturn on the other hand, and that’s actually one of the main things we are trying to do by ensuring the flow of credit in the economy and keeping interest rates low is to ensure that upturn, when it does come is as powerful as possible. ‘
And he vowed that the fed would not “run out of ammunition” to protect the economy.
“When it comes to this lending, we won’t run out of ammunition. That’s not going to happen, “he said.