US Fed Reserve anticipates slow economic recovery post pandemic, unemployment to fall 9.3% by end of 2020
Jun 11, 2020
Washington D.C. [USA], June 11 : The US Federal Reserve has anticipated a slow economic recovery from the coronavirus pandemic, which has wiped out tens of millions of jobs across the country.
According to The Washington Post, Fed Chair Jerome H. Powell said on Wednesday that millions of Americans may never get their jobs back and that Congress will probably need to extend additional aid as unemployment remains at historic highs.
Meanwhile, the Organization for Economic Cooperation and Development said on the same day that the global economy is "experiencing the deepest recession since the Great Depression in the 1930s."
The Reserve predicted unemployment in America will be falling to 9.3 per cent by the end of this year and to 6.5 per cent by the end of 2021, as tens of millions of Americans are gradually losing their jobs in the stunning recession caused by the outbreak of the novel coronavirus.
To revive the economy from the deepest recession since the Great Depression, the Fed pledged to keep interest rates at zero, most likely through 2022, and to continue its extensive bond-buying programs at the current pace for the foreseeable future.
Low-interest rates have spurred enormous stock market gains and made it cheap to get a loan for a car, mortgage or business operation. But a prospective borrower generally needs to have savings and a stable job to get access to credit or invest in the market. The Fed has limited tools to use in emergency situations such as this, and they tend to buoy Wall Street far more than Main Street.
However, Powell defended the Fed's actions, arguing that the central bank's swift intervention helped prevent the health and economic crisis from turning into a financial panic that would have cost more jobs and caused far more bankruptcies. But he said that the Fed's tools are blunt and that Congress may have to play the bigger role in helping specific people and companies hardest hit by the crisis.
At least 110,000 people in the United States have died of the coronavirus, and nearly 2 million cases have been reported. More than 7,347,000 cases and 414,000 deaths have been reported worldwide, according to data compiled by Johns Hopkins University.
