Fed Chairman Jerome Powell has expressed optimism that the U.S. economy can begin to recover in the second half of the year, assuming the virus doesn't spike again. On CBS's '60 Minutes', Powell said a full recovery is unlikely until a vaccine arrives.
FILE - In this Tuesday, March 3, 2020 file photo, Federal Reserve Chair Jerome Powell pauses during a news conference to discuss an announcement from the Federal Open Market Committee, in Washington. Federal Reserve Chair Jerome Powell expressed optimism Sunday, May 17, 2020 that the U.S. economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus doesn't erupt in a second wave.
In an interview with CBS’s “60 Minutes,” Powell noted that the economy was fundamentally healthy before the virus struck suddenly and forced widespread business shutdowns and tens of millions of layoffs. Once the outbreak has been contained, he said, the economy should be able to rebound “substantially.”
Powell pointed out that the downturn wasn’t a result of deep-seated financial instabilities, like the housing meltdown and the excessive risk-taking among banks that ignited the Great Recession. Rather, it resulted from an external event — a pandemic — that required a shutdown of the economy. That may mean, he said, that “we can get back to a healthy economy fairly quickly.”
Still, Powell cautioned that it would take time for the economy to return to anything close to normal. A recovery “could stretch through the end of next year,” he said. And a vaccine would likely be necessary for Americans to feel safe enough to return to their normal economic behavior of shopping, traveling, eating out and congregating in large groups — activities that fuel much of the economy’s growth.
“That would mean,” he added, ”that we will start our recovery and get on that road, and that’ll be a good thing, but that it’ll take some time to pick up steam.”
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