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Business & Technology

Powell Says 'Concerning' Increase in COVID-19 Cases Could Prevent Economic Recovery

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Powell Says 'Concerning' Increase in COVID-19 Cases Could Prevent Economic Recovery

2020-11-06 15:42:58

By Laura Tucker, Staff writer; Image: Jerome Powell (Image source: Public domain)

Another faction of government that is closely watching the recent surge in coronavirus cases is the Fed. Jerome Powell, Federal Reserve chairman, said on Thursday that the surge in the United States and Europe poses difficulty for economic recovery from the pandemic.

At a Thursday press conference, Powell said, "The recent rise in new COVID-19 cases both here in the United States and abroad is particularly concerning" to the central bank. He added it's dangerous to the country's economy as well.

"As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend in large part on the success of efforts to keep the virus in check," he added. This statement was made after the Fed made an announcement it would be keeping interest rates close to zero.

"All of us have a role to play in our nation's response to the pandemic. Following the advice of public health professionals to keep appropriate social distances and to wear masks in public will help get the economy back to full strength," added Powell.

The third wave of COVID-19 cases has been across the country. On Wednesday more than 100,000 new coronavirus cases in a single day,  hitting that benchmark for the first time since the pandemic began early this year. The COVID Tracking Project shows about 52,000 people currently hospitalized.

Fed officials, including Powell, and economists have said throughout that the economy would never fully recover until the virus was under control. The failure to do so has upended the economy that depends on travel and get-togethers, large and small. It has led to a loss of millions of jobs and has threatened thousands of businesses. Those who haven't already closed are wondering how much longer they can go on.

"It does seem likely that people who have maybe begun to engage in activities that they  hadn't — flying, staying in a hotel, going to restaurants, going to bars and things like that," the chairman explained," that they may pull back in a situation where suddenly cases are everywhere in your city, your state, your community."

"That could weigh on economic activity," continued Powell. He also acknowledged  that the summer surge in cases had a limited impact on the national economy.

He voiced his opinion as well of the need for another stimulus relief bill. He believes it will help that lag in the recovery and possibly prevent long-term damage while also supporting Americans facing a dire situation.

House Democrats have been working on another stimulus package since May. They passed one, but Senate Majority Leader Mitch McConnell (R-KY) never brought it to the Senate floor. He did introduce a slimmed-down package, worth $500 billion, and tried to put it through twice, but Democrats rejected it both times.

Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi (D-CA) negotiated for months, and the House passed another package, reducing the cost to $2.2 trillion. Mnuchin offered $1.9 trillion. They got closer but could never finalize it.

"We'll have a stronger recovery if we can just get at least some more fiscal support when it's appropriate and to the size Congress thinks it's appropriate," said Powell. 

"There are plenty of people on Capitol Hill — on both sides of the aisle, on both sides of the Hill — who see a need for further fiscal action and understand perfectly why that might be the case," he noted.

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