Jerome-Powell Reveals why U.S.-Economy can’t Recover

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Jerome-Powell Reveals why U.S.-Economy can't Recover
Jerome-Powell Reveals why U.S.-Economy can't Recover

Jerome-Powell Reveals why U.S.-Economy can’t Recover

Federal Reserve Chairman Jerome Powell warned Americans that the economic downturn triggered by the coronavirus outbreak could last until the end of 2021 because recovery won’t happen until people feel confident about their safety.

In a CBS 60 Minutes interview Sunday, Powell expressed his belief that domestic economy recovery from the pandemic might not happen until late 2021. “People will go back to work. Unemployment will get down,” he said. “We’ll get through this. It may take a while. It may take a period of time. It could stretch through the top of next year. We really don’t know.”

“This may be a period of great pain and agony,” Powell said, “and this hit us so quickly and with great momentum, that you simply really can’t put into words the pain people are feeling and therefore the uncertainty they’re realizing. And it’s getting to take a short time for us to urge back.”

Jerome-Powell Reveals why U.S.-Economy can’t Recover

He also said a full recovery will be closely tied with consumer confidence in being around others, which may only return to normal after a vaccine: “The parts of the economy that involve people being in the same place very close together, those parts of the economy will be challenged until people feel really safe again.”

“Until people can attest that they are safe, we can’t recover totally” Powell added.

Jerome-Powell Reveals why U.S.-Economy can’t Recover. Since mid-March, over 36 million Americans have filed for unemployment benefits after states’ stay-in-place orders and fears of catching the virus left businesses unable to retain staff.

Powell noted that unemployment could peak at 25 percent, with the low-earning and female population being more impacted by the downturn. But Powell added that he believes the country will avoid a depression.

“I don’t think depression would be a possible outcome in the least ,” he said. “There are some very fundamental differences. The first is the cause here—we had a very healthy economy two months ago. And this is an outside event, it is a natural disaster, in effect. And that’s one big difference.”

Jerome-Powell Reveals why U.S.-Economy can’t Recover

Democratic lawmakers in the House on Friday passed an additional $3 trillion stimulus relief package to buffer the impacts of the pandemic. The bill may not pass the Republican-led Senate, as Senate Majority Leader Mitch McConnell has indicated that he believes there’s “no urgency” to act now. However, the Federal Reserve has injected trillions into the financial system to further combat the economic downturn.

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