Powell: Coming Months Could be Challenging

The Chairman of the United States Federal Reserve, Jerome Powell, said on Thursday that economic recovery in the US has been faster and stronger than expected, but it is slowing a bit, which is understandable.

The recovery remains uneven and incomplete, according to Powell’s remarks to the European Central Bank (ECB) forum on central banking.

There remains 20% unemployment among people at the lowest quartile, with around 10 million people out of work.

However, Powell said that the Fed continues to see the economy on a solid path to recovery but with the main risk to that being the further spread of the Coronavirus disease (COVID-19).

The US is seeing a record number of new cases and some states are re-imposing limited activity restrictions, which could lead people to lose confidence to go out.

“We said from the beginning that the economy will not fully recover until people are confident that it is safe to resume activities involving crowds of people.”

Speaking about the vaccine, Powell said that updates about vaccine are certainly good and welcomed news on the medium turn, but warned that uncertainties remain regarding timing, production, and distribution and the efficacy for different groups.

It is too soon, according to the Fed Chair, to assess, with any confidence, the implications of the news on the path of the economy, especially with the virus currently spreading, which means the upcoming months could be challenging.

Powell refused to comment on the election results, but noted that the Fed will continue to work until the American economy is able to fully recover.