Fed Chair Warns Full Recovery ‘Unlikely’ Until People Believe Coronavirus is ‘Contained’
Federal Reserve Chairman Jerome Powell warned a Senate committee that a full economic recovery from the coronavirus crisis is “unlikely” unless “the public is confident that the disease is contained.”
On Tuesday, Powell testified before a Senate Banking, Housing and Urban Affairs Committee hearing on monetary policy, and used his opening remarks to offer a sobering warning about the future of the economy.
Powell noted the recent positive jobs report, but added “That said, the levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery.”
“Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely,” Powell said.
“Moreover, the longer the downturn lasts, the greater the potential for longer-term damage from permanent job loss and business closures,” he continued. “Long periods of unemployment can erode workers’ skills and hurt their future job prospects.”
He added that “Persistent unemployment can also negate the gains made by many disadvantaged Americans during the long expansion,” and that “The pandemic is presenting acute risks to small businesses.”
“If a small or medium-sized business becomes insolvent because the economy recovers too slowly, we lose more than just that business. These businesses are the heart of our economy and often embody the work of generations,” Powell said.
President Donald Trump has chalked up increasing infection rates to the expanded availability of testing, saying recently that “If we stopped testing right now, we’d have very few cases if any.”
The Trump campaign says more than a million people have requested tickets to Trump’s June 20 rally in Tulsa, Oklahoma.
Watch the clip above via C-Span.
Have a tip we should know? [email protected]