Federal Reserve Chairman Jerome Powell explained the connection between public health and the economy as he stressed the importance of how safety measures can help the U.S. economy.
Powell held a press conference on Wednesday to announce the federal decision not to change interest rates. During the hearing, Powell made it clear that “we’re not evening thinking” about raising interest rates.
“We’re not even thinking about, thinking about raising rates. We’re totally focused on providing the economy the support that it will need” he said.
The federal chairman also offered his take on what the economy will likely need to recover and stabilize.
Powell continued, “We think that the economy will need highly accommodative monetary policy in the use of our tools for an extended period and we’re absolutely committed to staying in this until we’re very confident that that is no longer needed.”
See Powell’s remarks below:
He also noted how economic recovery will be contingent on “the course of the virus” and the measures taken to mitigate the spread of it.
“The path of the economy is going to depend to a very high extent on the course of the virus and on the measures we take to keep it in check,” Powell said, adding, “Social distancing measures and a fast reopening of the economy — they actually go together. They’re not in competition with each other.”
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While President Donald Trump has repeatedly touted the likelihood of a rapid recovery, Powell suggested otherwise as he noted concerns about the long-term impacts on the economy.
He also expressed concern about workers in “heavily affected areas” of the country who may face challenges returning to work.
“I think the picture is you have the lockdown then you have the reopening,” Powell said. “But there’s probably going to be a long tail where a large number of people are struggling to get back to work because those heavily affected areas of the economy are going to be challenged to employ the millions of people who are now out of work.”
Although Powell has suggested the road to recovery will be a lengthy one, he insists they will do everything in their power to help with economic recovery.
Powell said, “That’s going to take a while I think in everyone’s reckoning and everyone should know that we’re going to be there for all of that.”
