US Federal Reserve President Jerome Powell stated that the path to the economy is “extraordinarily” ambiguous and largely dependent on success in controlling the virus.
“The recovery is not possible until people are confident that it is safe to re-engage in a wide range of activities,” said US Federal Reserve (Fed) President Jerome Powell, saying that the path to the economy is “extraordinarily” ambiguous and largely dependent on success in controlling the virus. ” used expressions.
The Fed has released the text of President Powell’s presentation on the Financial Services Committee of the House of Representatives tomorrow on the Coronary Virus Assistance, Support and Economic Security Surveillance Act.
In his presentation, Powell noted that the COVID-19 outbreak continues to cause major challenges throughout the US and the world.
Reminding that there was a sharp decline in economic activity as of March with the effect of the COVID-19 outbreak and the importance taken against it, Powell noted that the gross domestic product will likely decrease in the second quarter of this year.
“We have entered an important new stage”
Reminding that the crisis was interfered by the government with a rapid and strong policy action, Powell said that this intervention not only helps households and businesses, but also makes a difference in limiting permanent losses in the economy.
Stating that the data coming as the economy normalizes, economic activity has started again, Powell continued:
“Many businesses are opening their doors, hiring and spending are increasing. Employment has increased and consumer spending has recovered strongly in May. We entered an important new phase and realized faster than expected. While this recovery in the economy was welcomed, new challenges such as the need to keep the virus under control are also welcomed. offers. ”
Emphasizing that more than 20 million Americans have lost their job, Powell said that the increase in unemployment is more severe, especially for low-wage workers, women, black Americans and Hispanics, although the latest data on the economy show positive signals.
Signal to keep interest rate at current level
“Production and employment remain well below their pre-pandemic levels. The path to the economy is extremely ambiguous and largely dependent on our success in controlling the virus. Full recovery is possible until people are confident that it is safe to re-engage in a wide range of activities.” not.” found the assessment.
Underlining that the road to the economy also depends on the policy actions of the government to support recovery, Powell undertook the policy rate to reduce the rate of interest to zero in March and to make sure that the economy will achieve its targets for maximum employment and price stability, as it is confident that the economy has overcome the recent problems. He expressed.
Recalling the steps the Fed has taken so far against the economic effects of the COVID-19 outbreak, Powell noted that they will be closely monitoring the developments and are ready to properly adjust their plans to support the bank’s goals.
