Fed Chairman Paints Grim Second Quarter Recovery Outlook

WASHINGTON, DC – Testifying before the Senate Banking Committee Tuesday, Federal Reserve Chairman Jerome Powell flagged risks that could arise if the economic downturn associated with the pandemic continues for an extended time period. These risks include “lasting damage to the productive capacity of the economy through the labor force because of long term unemployment” along with “unnecessary, avoidable insolvencies on the of small and medium-sized businesses.” He added that additional fiscal or monetary policy support may be necessary, depending on how the recovery proceeds. Powell noted that congressional efforts to date have been “timely and forceful,” adding that “we need to take a step back and ask, over time, is it enough, and be ready to act if the need is there.” Powell also praised the banking industry’s response to the pandemic.
(SOURCE: American Bankers Association)