15:08 GMT25 November 2020
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    WASHINGTON (Sputnik) - The US economy may take several months longer to recover from the devastation from the coronavirus (COVID-19) outbreak than was initially expected, Federal Reserve Chairman Jay Powell said on Wednesday.

    "It may take even just a few more months than we like for the economy to recover," Powell said at an event hosted by the Peterson Institute of International Economics. "I have every reason to think we can get back there and the economy should substantially recover once the virus is under control, but the recovery may come more slowly than we would like and that may mean it's necessary for us to do more."

    The consumer-driven US economy shrank 4.8 percent in the first three months of 2020 as it was hit by a shuttering of so-called "non-essential" businesses from March in most of the 50 US states in efforts to curb the spread of COVID-19.

    While the first-quarter decline was already the sharpest since the Great Recession of 2008, both White House and private economists predict that the current quarter between April and June would be worse, saying the now mostly-reopened economy was not expected to show much recovery until the third quarter.

    The Federal Reserve dropped US interest rates to between zero and 0.25 percent in March and has since launched a battery of other COVID-19 fiscal responses, including open-ended bond-buying and lending to heavily-indebted companies but with ability to repay under its Main Street Lending program.

    Powell said the central bank was trying to return to a sustainable fiscal path "where you've got the economy growing faster than the debt and overhead" so that the ratio of debt could be reduced to the size of the economy.

    COVID-19, coronavirus, Federal Reserve, economic recovery, economy, US Federal Reserve, U.S
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