US Fed Chairman says 'this is the worst economy in history' amid COVID-19 crisis

Head of the Federal Reserve, Jerome Powell, said as of April 30 that it is the “worst-ever” economy with only lingering hopes for the rebound from the novel coronavirus pandemic. Speaking at a virtual web press conference, the Fed Chairman said that the data for the second quarter has been worse than any data he had seen for the economy as a direct consequence of the disease outbreak and the measures to stem it. 

Further indicative of the crisis, he said that the recovery would be “long and painful” and the Federal Reserve will have to keep its key short-term interest rate near zero for a foreseeable future. Powell regretted the gravity of the economic downturn caused by the coronavirus, the economy due to which, sank to worst since the 1930s. However, he extended support as the virus would imperil the economy further for potentially a year or longer if the vaccine wasn't developed, he anticipated, while speaking at the conference. 

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Can give loans, not grants

Warning businesses of bankruptcy, Powell spoke about the prolonged recession and high unemployment rate that is expected to impact the skilled workers. Adding to his previous concerns about the surging deficits, he made an indirect statement to Congress, that the air for the response to the crisis should, nonetheless, keep flowing. “It will probably take some time for us to get back to a more normal level of employment and ultimately, maximum employment,” the chairman stressed. 

Earlier, Congress approved more than $2.5 trillion for rescue plans as the cost of expanded government aid, according to media reports. To which, Powell said, “Elected officials have the power to tax and spend and direct how we as a society direct our resources. This direct support can make a critical difference in limiting long-lasting damage to our economy.” Further, he noted, that Federal Reserve, unlike Congress, was in a state to support via loans, not grants, it can, however, provide an array of emergency lending and bond-buying programs, the Chairman said at the conference. “We will use our powers forcefully, proactively, and aggressively until we’re confident that we are solidly on the road to recovery,” he said. 

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