Fed Chairman Powell: For the recovery of the US economy needs more support. US Federal Reserve (Fed) Chairman Powell, the US economy affected by the Covid-19 outbreak. He stated that he needed more support for his recovery.
US Federal Reserve (Fed) Chairman Jerome Powell made evaluations on the economic outlook at the annual meetings of the National Business Economics Association (NABE).
Stating that the Covid-19 recession was unusual because it not caused by financial or economic imbalances, Powell. He described the epidemic shock as “the natural disaster that hits a healthy economy”.
Powell, the impact of the Covid-19 outbreak, 31 percent of the US economy in the second quarter of this year. He reminded that it was contracting and that the labor market negatively affected.
Recalling the measures taken by the Fed against the economic effects of the epidemic, Powell. He said that the bank used all its tools against the pandemic.
Powell pointed out that the bank has also implemented temporary measures aimed at specific targets. “Financial intervention has been truly extraordinary,” he said.
Underlining that financial aid provides vital support to households, Powell. “Still many people are likely to experience prolonged unemployment, more support will be needed.”
Powell noted that investments and new business startups are recovering. He said that this indicates some confidence on the road ahead of the economy.
Pointing out that financial markets have largely returned to their normal functioning, Powell said.
“Fiscal and monetary policy actions have so far supported a strong but incomplete recovery in demand. For the time being it has significantly relieved the normal recession dynamics occurring in an economic recession.”
“The effects of fiscal and monetary policy have so far supported the robust recovery of the labor market,” Powell said. Although it helps, there is still a long way to go.”
Stating that recovery is progressing faster than expected overall, Powell said. “The economic outlook remains uncertain, partly because it depends on controlling the spread and effects of the virus.”
“The pace of economic recovery, as seen in employment, income and expenditure data. It has followed a moderate course since the big gains in June. “The increase in permanent job loss and recent layoffs are also noteworthy.”
Emphasizing the need to continue working to manage downside risks to outlook, Powell. One of these risks is that Covid-19 cases increase to a level that will limit economic activity. He stated that the other risk is a prolonged slowdown in the economic recovery.
“A long period of slow progress could continue to worsen existing inequalities in our economy,” Powell said. This would be tragic, especially in the light of the progress our country has made in the process up to the pandemic.”
Underlining that the enlargement is still far from complete, Powell continued:
“Too little support leads to a weak recovery and creates unnecessary difficulties for households and businesses. Over time, household and business bankruptcies increase, damaging the productive capacity of the economy, preventing wage growth. Against this, the risks of over-incentive appear to be less for now. Policy actions will not go to waste, even if ultimately more than necessary. Until the monetary and fiscal policy problem is clearly overcome. Until the monetary and fiscal policy problem is clearly overcome.