Fed chair expresses cautious optimism

Federal Reserve Chair Jerome Powell expressed optimism that the U.S. economy can begin to recover from a devastating recession in the second half of the year, assuming the coronavirus doesn’t erupt in a second wave. But he suggested that a full recovery won’t likely be possible before the arrival of a vaccine.

In an interview Sunday with CBS’ “60 Minutes,” Powell noted that the economy was fundamentally healthy before the virus struck suddenly and forced widespread business shutdowns and tens of millions of layoffs. Once the outbreak has been contained, he said, the economy should be able to rebound “substantially.”

Powell offered an overall positive message while warning that it would take much longer for the economy to regain its health than it took for it to collapse with stunning speed.

“In the long run, and even in the medium run,” the chairman said, “you wouldn’t want to bet against the American economy. This economy will recover. And that means people will go back to work. Unemployment will get back down. We’ll get through this.”

Powell played down comparisons to the Depression. He noted U.S. banks are far healthier now and the Fed and other central banks are much more able and willing to intervene to bolster economies than they were in the 1930s. Still, Powell cautioned that a recovery “could stretch through the end of next year,” and a vaccine would likely be necessary for Americans to feel safe.

AP Federal Reserve Chair Jerome Powell said it will take a vaccine to get the economy back to humming as it was.