What central banks were really saying about their response to COVID-19
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In statements released this morning about COVID-19, the U.S. Federal Reserve and G7 finance ministers addressed the economic fallout from the outbreak of the virus and reaffirmed their efforts to counter the damage caused by it.
The G7 statement used phrases like “standing ready” and “maintaining the resilience of the financial system,” language meant to impart confidence. But it came as the U.S. Federal Reserve cut the “federal funds rate,” an emergency move that hasn’t happened since the dawn of the financial crisis, and sent markets into a spiral. Fed Chair Jerome Powell then held a press conference about the rate cuts, calling the outbreak a “fluid” situation.
Jessica Rett, a linguist at UCLA, broke down the language used today with “Marketplace” host Kai Ryssdal. She considered what the central banks were really saying about COVID-19, and why, ultimately, it didn’t make leave the markets feeling very calm.
“If you say something like ‘Everybody stay calm,’ I think the first thing that people think of, if they are calm, is: ‘Oh, goodness, why are you telling me to stay calm?'” Rett said.
Click on the player above to hear the interview.
COVID-19 Economy FAQs
What do I need to know about tax season this year?
Glad you asked! We have a whole separate FAQ section on that. Some quick hits: The deadline has been extended from April 15 to May 17 for individuals. Also, millions of people received unemployment benefits in 2020 — up to $10,200 of which will now be tax-free for those with an adjusted gross income of less than $150,000. And, for those who filed before the American Rescue Plan passed, simply put, you do not need to file an amended return at the moment. Find answers to the rest of your questions here.
How long will it be until the economy is back to normal?
It feels like things are getting better, more and more people getting vaccinated, more businesses opening, but we’re not entirely out of the woods. To illustrate: two recent pieces of news from the Centers for Disease Control. Item 1: The CDC is extending its tenant eviction moratorium to June 30. Item 2: The cruise industry didn’t get what it wanted — restrictions on sailing from U.S. ports will stay in place until November. Very different issues with different stakes, but both point to the fact that the CDC thinks we still have a ways to go before the pandemic is over, according to Dr. Philip Landrigan, who used to work at the CDC and now teaches at Boston College.
How are those COVID relief payments affecting consumers?
Payments started going out within days of President Joe Biden signing the American Rescue Plan, and that’s been a big shot in the arm for consumers, said John Leer at Morning Consult, which polls Americans every day. “Consumer confidence is really on a tear. They are growing more confident at a faster rate than they have following the prior two stimulus packages.” Leer said this time around the checks are bigger and they’re getting out faster. Now, rising confidence is likely to spark more consumer spending. But Lisa Rowan at Forbes Advisor said it’s not clear how much or how fast.
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