Fed Chief Says Coronavirus Surge Slowing US Economic Recovery

The surge in U.S. coronavirus cases is beginning to weigh on economic activity, the head of the 🏦Federal Reserve said on Wednesday, and he promised the U.S. central bank would “do what we can, and for as long as it takes,” to limit damage and boost growth.

“It looks like the data are pointing to a slowing in the pace of the recovery,” Fed Chair 👤Jerome Powell said at a news conference, pointing to an apparent pullback by consumers and a slowdown in the rehiring of furloughed workers, particularly by small businesses.

The United States, he said, “has entered a new phase in containing the virus, which is essential to protect both our health and our economy.”

Powell’s comments, made via videoconference after the Fed announced its policy decision to leave interest rates near zero, suggest dimming hopes for a quick economic rebound. Coronavirus infections have exploded in a number of Southern and Southwestern states in recent weeks, and some states have paused or rolled back reopening measures.

The Fed’s policy statement, released at the close of its two-day meeting, directly tied the economic recovery to resolution of a health crisis whose direction remains much in doubt. More than 150,000 Americans have died from COVID-19, the respiratory illness caused by the novel coronavirus.

“The path of the economy will depend significantly on the course of the virus,” the central bank’s policy-setting Federal Open Market Committee (FOMC) said.

In his news conference, Powell elaborated on just how much remained unclear about the direction of the world’s largest economy. Fiscal programs that he credits with sustaining consumer spending in recent weeks are about to expire, with debate still under way in Congress over what, if anything, will take their place.