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.
COVID-19 Economy FAQs
Are states ready to roll out COVID-19 vaccines?
Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.
How is the service industry dealing with the return of coronavirus restrictions?
Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.
How are hospitals handling the nationwide surge in COVID-19 cases?
As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.
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