Federal Reserve Chairman Jerome Powell said Sunday that Americas economy may not recover from the COVID-19 crisis until the end of 2021, casting doubt on hopes for a quick, V-shaped rebound.
Powell told CBS in an interview on 60 Minutes that while the Fed is “not out of ammunition by a long shot,” referring to the pallet of crisis response tools it has deployed to shield businesses and families from the worst of the outbreak, he said the U.S. economy could be in for a prolonged bout of pain.
“It could stretch through the end of next year,” Powell said. “We really dont know. We hope that it will be shorter than that, but no one really knows.”
The Fed Chairman said second-quarter economic activity, as measured by Gross Domestic Product (GDP), could fall by an annualized rate of over 30 percent.
“The numbers are going to be very high. And its hard to be precise. I wouldnt want to guess,” he said of the fall in GDP. “[It] could easily be in the twenties or thirties.”
The Fed Chairmans remarks to CBS reinforce statements he made last week, in which he warned of lasting harm to harm to the economy unless policies were brought to bear to counteract the damage.
“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” Powell said in prepared remarks before holding an online discussion with the Peterson Institute for International Economics.
The outbreak of the CCP (Chinese Communist Party) virus, the novel coronavirus that causes the COVID-19 disease, has battered economies worldwide.
In the United States, the virus-related lockdowns and plummeting demand have destroyed a record 20.5 million jobs in April, according to Labor Department figures released May 8, and pushed the unemployment rate to 14.7 percent, both post-World War II records.
“This is a time of great suffering and difficulty,” Powell told CBS. “And its come on us so quickly and with such force, that you really cant put into words the pain people are feeling and the uncertainty theyre realizing.”