Federal Reserve Chairman Jerome Powell told lawmakers that a full recovery from the pandemic-driven recession is “unlikely” until Americans no longer fear contracting COVID-19, despite recent strong economic data.
US economy faces “significant uncertainty” in the months ahead, and that the recession that has followed in the wake of the coronavirus pandemic could widen income inequality for minorities and those on lower incomes.
In his testimony before the Senate Banking Committee on Tuesday, the Fed chief warned that the U.S. economy will continue to suffer as long as the coronavirus lingers.
“Recently, some indicators have pointed to a stabilization, and in some areas a modest rebound, in economic activity. With an easing of restrictions on mobility and commerce and the extension of federal loans and grants, some businesses are opening up, while stimulus checks and unemployment benefits are supporting household incomes and spending,” Powell said.
“That said, the levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery,” he continued. “Until the public is confident that the disease is contained, a full recovery is unlikely.”
