Fed Chair Powell says full economic recovery depends on managing COVID-19
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The Federal Reserve came out with its latest assessment of the U.S. economy. The Fed’s interest rate setting committee met yesterday and, as expected, decided to keep rates pandemic low, near zero.
Marketplace’s Nancy Marshall Genzer was at the Fed news conference. The following is an edited transcript of her conversation about it with “Marketplace Morning Report” host David Brancaccio.
David Brancaccio: What did you hear from Fed Chair Jerome Powell?
Nancy Marshall-Genzer: His main message was that the recovery depends on well we manage the coronavirus. He said if people can keep social distancing and wearing masks, that will help get the economy back to full strength. Powell also said the Fed won’t lose sight of the the millions of people who remain out of work. And he said he recognizes the economic downturn isn’t falling equally on everyone.
Brancaccio: Did Powell have new ideas to help those who’ve lost their jobs?
Marshall-Genzer: Remember, David, the Fed doesn’t have the tools to directly help people who’ve lost their jobs. It makes loans, not grants. And Powell repeated what we’ve heard several times over the past few months: Congress needs to pass another relief package.
Jerome Powell: I think we’ll have a stronger recovery if we can just get at least some more fiscal support when it’s appropriate — when it’s appropriate and the size that Congress thinks is appropriate.
Brancaccio: Did Powell have any predictions for economic growth the rest of this year?
Marshall-Genzer: He said the economy is still growing, but not like it was in May and June. He called the job gains in the spring “outsize.” But again Powell came back to the virus. He said it’s a big headwind for the economy right now. He also cited the risk that households will run through what’s left of their savings and pull back on spending.
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