Fed Chair Powell Says U.S. Economy Faces Steep Downturn From Coronavirus
The chair of the Federal Reserve Wednesday dashed lingering hopes for a fast rebound from the coronavirus outbreak, saying the U.S. economy may feel the weight of consumer fear and social distancing for a year or more in a prolonged spike from a deepening hole.
After a two-day policy meeting in which the U.S. central bank kept rates of interest close to zero and promised to broaden emergency programs as needed to support the battered economy, Fed Chair Jerome Powell offered no sanguine words about how fast the nation might return – if ever – to the near-record low unemployment and stable progress of a few weeks-prior
The first part of recovery may very well happen soon, Powell told journalists in a videoconference after the end of the coverage meeting, as some U.S. states allow stores and even restaurants to reopen under tightened guidelines meant to sustain progress in containing a pandemic that has killed over 60,000 people in the nation.
In its policy assertion Wednesday, the Fed left its benchmark overnight lending rate in a target range of 0% to 0.25% and repeated a vow to use its “full vary of instruments” to shore up the economy amid what it now says are considerable risks over the medium term.
However, even if that takes hold by late summer, “that’s the period as well that creates the risks of recent outbreaks of the virus,” Powell stated, a scenario that health officers and economic analysts say could leave the economy in a recurring cycle of tentative reopenings followed by reimposed bans to fight new outbreaks.