Business & Economy

Fed’s Powell: Post-coronavirus recovery could last through 2021

Washington, May 17 (efe-epa).- A full US economic recovery from the multifaceted crisis caused by the coronavirus could last until the end of 2021 and may require a vaccine for the sometimes deadly Covid-19 caused by the virus, Federal Reserve Chairman Jerome Powell warned on Sunday.

“This economy will recover. It may take a while … It could stretch through the end of next year. We really don’t know,” Powell told the CBS news show “60 Minutes,” which was to air Sunday afternoon.

However, he said he was “optimistic” regarding the eventual economic recovery of the country despite the current “uncertainty.”

“Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year,” the head of the US central bank said.

But, “for the economy to fully recover people will have to be fully confident and that may have to await the arrival of a vaccine.” Powell added.

President Donald Trump has set a target of having a vaccine by the end of this year, but experts are more cautious and say that it will take at least until early 2021 for one to be widely available.

To alleviate the economic impact of the health and economic emergency, the Fed has been employing its full monetary arsenal, delivering massive injections of liquidity into the financial markets, buying huge amounts of debt and lowering interest rates practically to zero.

Powell has also urged Congress to take additional fiscal measures to deal with an “unprecedented” crisis that has thrown more than 36 million Americans out of work and forced them to request unemployment payments.

The crisis “has come on so quickly, and with such force that you really can’t put into words the pain people are feeling and the uncertainty they’re realizing,” Powell added.

According to a survey the Fed published this past week, almost 40 percent of US households earning less than $40,000 per year lost a job in March.

The initial GDP calculation for the first quarter of 2020 showed a 4.8 percent contraction but it is expected that the figures for the second quarter will be much worse.

In addition, unemployment in the US shot up by 10.3 percent in April to 14.7 percent, a level not seen in 70 years, as a result of the wave of layoffs and outright firings of workers.

US health authorities have detected more than 1.4 million confirmed coronavirus cases nationwide and almost 90,000 people have died in this country from Covid-19, according to the independent tally being kept by The Johns Hopkins University.

EFE

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