Slow and risky recovery.
“The recovery in the economy is extraordinarily uncertain and will largely depend on our success in containing the virus. A full recovery is unlikely until people trust that it is safe to re-engage in a wide range of activities.”
Powell: “A full recovery before containing the coronavirus is unlikely”. These are the words of Jerome Powell, president of the United States Federal Reserve (Fed). “Recovery will also depend on political actions taken at all levels of government to provide aid and support recovery for as long as it takes,” added the world’s most powerful central banker.
Powell has made these statements during his appearance before the House of Representatives’ Financial Services Committee. He also pointed out that the recovery of activity and employment in the US has been faster than the central bank expected, but that the reopening process carries other important risks and challenges, such as controlling the spread of the virus.
In addition, it has reaffirmed the Fed’s full commitment to supporting the economy. However, what Treasury Secretary Steven Mnuchin has to say about a potential new government-sponsored tax aid package remains to be seen, as the current one expires in late July.
The Treasury secretary will say that “the US is in a strong position to recover” and that, depending on the outlook, the Treasury may “work more with Congress on aid in July.”