Jerome Powell, chairman of the US Federal Reserve System, warned that the full recovery of the US economy from the effects of the new coronavirus pandemic could be delayed until the end of 2021. He expressed this opinion in an interview with CBS.
“This may stretch until the end of next year. We don’t know for sure, ”Powell admitted. – For the economy to fully recover, people must be completely sure. Perhaps this requires waiting for the vaccine. ”
As EADaily reported, last week the US Department of Labor announced that in April the country’s unemployment rate reached a record 14.7%. According to experts interviewed by The Washington Post, there were about twice as many employee cuts during this period than during the 2008 global financial crisis. US GDP in the I quarter of 2020 for the first time in six years fell by 4.8% year on year due to the situation around the pandemic.
It should be noted that earlier – in March, the Fed lowered its key rate twice a month. First, up to the level of 1–1.25% (before that it was 1.5–1.75%), then almost to 0–0.25%. The regulator promised to keep the bar at the “near-zero level” until he was sure that “the economy has suffered the latest events and is moving towards the goals of maximum employment and price stability.”
The latest Fed report warned that prices in global financial markets could fall again if the situation with the coronavirus develops in an unpredictable scenario.
“The value of assets remains vulnerable to a significant reduction if the pandemic develops in an unpredictable direction, the economic consequences turn out to be more unfavorable or difficulties arise again in the financial system,” the report says.
The American regulator emphasizes that the prospects for economic activity taking into account the coronavirus remain unclear.