“Jerome H. Powell, the Federal Reserve chair, said that the United States would have a slow recovery from what he called the ‘biggest shock that the economy’s had in living memory,’ suggesting that a full rebound from virus-induced lockdowns could take until the end of 2021,” as The New York Times is reporting.
“In an interview on ’60 Minutes,’ the CBS program, Mr. Powell reiterated that both Congress and the central bank may need to do more to help workers and businesses make it through the sudden and sharp slump caused by efforts to contain the coronavirus.
“’This economy will recover; it may take a while,’ Mr. Powell said. ‘It may take a period of time, it could stretch through the end of next year, we really don’t know.’
“The Fed has rushed to insulate the economy as coronavirus lockdowns caused business activity to come to near standstill, leaving more than 20 million people jobless. But it remains an open question whether the central bank’s actions will be sufficient if it takes a long time for the economy to fully reopen, leaving businesses short on income for an extended period and increasing the risk that many will close.”
The rest of the article is here.
One thought on “Fed Chair says economic recovery may ‘stretch’ through end of 2021”
There’s probably no reason to expect this second Great Depression to last any less long than the first one, especially since our current administration is probably more influenced by deficit hawks (except in support of tax breaks for the rich) than by FDR’s successful example. A successful economic recovery largely depends on a successful recovery from the pandemic, and its duration is largely dependent on wise policy decisions at the federal level. Which hasn’t actually happened yet. So, we’re in it for the long haul … years, not months.
By the way, by “wise policy decisions,” I mean something like this (which is unlikely to be implemented by either party):
“Maybe Modern Monetary Theory is an answer to the COVID-19 economic crisis“