Fed chair says ‘we may well be in a recession’ already

Business

The United States “may well be in a recession,” Federal Reserve Chair Jerome Powell says.

The Fed chair appeared Thursday on Today amid the COVID-19 coronavirus crisis and shortly before the Labor Department will release its highly-anticipated report on the number of unemployment claims filed last week.

Powell argued in the interview that the U.S. is not facing “a typical downturn” and that although “you may well see significant rises in unemployment, significant declines in economic activity,” there “can also be a good rebound” once the virus is under control.

Asked if the U.S. is already in a recession right now or if a recession is inevitable, Powell concluded “we may well be in a recession” but again argued this is different from a “normal recession” and that “there’s nothing fundamentally wrong with our economy.”

Savannah Guthrie asked Powell about any additional actions that may be taken by the Federal Reserve after its previous intervention and whether there is “any limit to the amount of money the Fed is willing to put into this economy to keep it afloat” amid the crisis. Powell responded that “essentially, the answer to your question, though, is no” and later said the Fed won’t “run out of ammunition.” He also told Today the “first order of business” will be to get the novel coronavirus’ spread under control and then to “resume economic activity.”

Experts are anticipating grim unemployment numbers from the Labor Department report on Thursday morning; Axios reports the figure could be as high as 3.4 million, which would be not only “the highest level in history” but “nearly five times the highest level of claims seen during the Great Recession.”

Powell’s morning show appearance on Thursday was a rare one, and CNN’s Phil Mattingly observed, “feel like a good barometer of how bad things are economically is the Fed chair is doing the Today show.”

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Source:: The Week – Business

      

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