Fed Chairman Powell: The economy cannot fully recover before the epidemic is controlled
On June 30th local time, Federal Reserve Chairman Powell attended The House of Representatives’ Financial Services Committee heard a hearing on the US economic recovery and other issues. Powell said that until the COVID-19 epidemic is brought under control and people are confident of returning to normal activities, a full economic recovery is impossible.
Powell said that the US government must introduce sufficient policies to provide the bailout and support needed for economic recovery. He also warned that if the second wave of outbreaks occurs, "public confidence will be damaged again."
At the same time, Powell emphasized that as the US economy rebounds from the worst recession ever, it is vital to contain the epidemic.
"We have entered an important new stage, and it is faster than expected." Powell said, "Although this rebound in economic activity is welcome, it also brings new challenges-especially It is necessary to control the virus."
Powell is optimistic about the recovery of some economic activities. He pointed out that recruitment activities are picking up and spending is also increasing. But he reminded that 20 million Americans have lost their jobs.
"The path of economic progress is unusually uncertain and will largely depend on our effectiveness in controlling the virus." He said, "It is unlikely that a full recovery will take place until people are confident of returning to normal activities. ”
“We can see that we may lower the threshold again.” Powell said of the Fed’s loan mechanism for SMEs, “just logically, we make very, very small loans. It will be very difficult."
Powell also admits that banks are not very active in SME loans. "Many of them said that they expected this to change over the course of the next few months." Powell said that the Fed is willing to make some changes to the SME loan mechanism if needed. (Gu Xiang, CCTV reporter)