Federal Reserve Chair Jerome Powell will testify before the Senate Banking Committee this week. Mark Makela/Getty Images
COVID-19

Fed Chair Powell to report to Congress on the COVID-19 economy

Nancy Marshall-Genzer Jun 16, 2020
Federal Reserve Chair Jerome Powell will testify before the Senate Banking Committee this week. Mark Makela/Getty Images

Federal Reserve Chair Jerome Powell starts two days of congressional testimony Tuesday. He’ll appear, remotely, before the Senate Banking Committee later this morning. Powell will discuss the Fed’s monetary policy report — an overview of the economy the Fed presents to Congress twice a year. And he’s following up on dire predictions from last week’s Fed meeting.

Expect Powell to elaborate on his pessimistic forecast after last week’s Fed meeting when he pointed out that millions of people who have lost their jobs during the COVID-19 pandemic may not get those jobs back.

“The Fed’s projection is for unemployment at the end of this year to be 9.3%, which we all believe is a pretty grim outlook,” said Tim Duy, an economist at the University of Oregon.

The Fed is also predicting that gross domestic product — the country’s total economic output —will end the year down 6.5% from the fourth quarter of 2019. Frances Donald, global chief economist at Manulife Investment Management, expects Powell to urge Congress to pass another relief bill.

“My sense is that Chair Powell is really going to try to highlight and underline as much as he can that his policies alone are simply not enough,” Donald said.

Donald said Powell will emphasize that the economy won’t bounce back quickly, and we have a long road ahead.

COVID-19 Economy FAQs

How many people are flying? Has traveled picked up?

Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.

How are Americans feeling about their finances?

Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.

Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.

What’s going to happen to retailers, especially with the holiday shopping season approaching?

A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.

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