Federal Reserve Chair Jerome Powell on Friday said a potential surge in U.S. coronavirus infections could derail the recovery from the deep downturn triggered by the pandemic, even as he reiterated the central bank's vow to keep fighting the crisis.
WASHINGTON - Federal Reserve Chair Jerome Powell on Friday said a potential surge in U.S. coronavirus infections could derail the recovery from the deep downturn triggered by the pandemic, even as he reiterated the central bank’s vow to keep fighting the crisis.
“I think a second wave would really undermine public confidence and might make for a significantly longer recovery and weaker recovery,” Powell said in a webcast with Alan Blinder, a Princeton University economics professor and former Fed vice chair. The remarks were a somber reminder that the trajectory of the crisis facing the Fed is a function of the public’s health, a factor over which the world’s most powerful central bank has no control.
Asked about limits to the Fed’s crisis toolkit, for instance, Powell said there were few, noting that in fighting “an emergency of a nature we haven’t really seen before ... we crossed a lot of red lines that had not been crossed before, and I am very comfortable that this is that situation where you do that.”
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