Federal Reserve Chair Jerome Powell expressed optimism Sunday that the U.S. economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave. In an interview with CBS’s “60 Minutes,' Powell noted that the economy
WASHINGTON — Federal Reserve Chair Jerome Powell expressed optimism Sunday that the U.S. economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave. But he suggested that a full recovery won't likely be possible before the arrival of a vaccine.
“In the long run, and even in the medium run," the chairman said,"you wouldn’t want to bet against the American economy. This economy will recover. And that means people will go back to work. Unemployment will get back down. We’ll get through this." In the interview with CBS, Powell played down comparisons to the Depression. While acknowledging that unemployment could peak near the Depression high of 25%, he noted that U.S. banks are far healthier now and that the Fed and other central banks are much more able and willing to intervene to bolster economies than they were in the 1930s.
The Fed chairman said he and other central bank officials, in conversations with businesses, labor leaders, universities and hospitals, have picked up on “a growing sense that the recovery may take some time to gain momentum.” If necessary, Powell said, the Fed could expand any of the nine emergency lending programs it has launched since the viral outbreak began to harm the economy — or create new ones. In March, the central bank slashed its benchmark interest rate to near zero as stock markets plunged and bond markets froze. The Fed has also intervened by buying $2.1 trillion in Treasurys and other bonds in an effort to keep interest rates low and smooth the flow of credit.
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