Fed chief warns US economic recovery could stretch through end of 2021 - The Boston Globe

Fed chief Jerome Powell will be questioned on the scale of fiscal relief when he appears at a Senate panel Tuesday. Jacquelyn Martin/Associated Press/File 2020/Associated Press

WASHINGTON — The US economy will recover from the coronavirus pandemic, but the process could stretch through the end of next year and depend on the delivery of a vaccine, said the chairman of the Federal Reserve, Jerome Powell.

‘‘Assuming there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,’’ the US central bank chief said in an excerpt of an interview conducted Wednesday and aired on Sunday on CBS’s ‘‘Face the Nation’’ show.

‘‘For the economy to fully recover people will have to be fully confident, and that may have to await the arrival of a vaccine,’’ he said.

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More than 36 million Americans have lost their jobs since February as much of the economy was shuttered to limit the spread of the virus. Countless companies, especially small businesses, are hurtling toward bankruptcy, while states and cities are confronting gaping budget shortfalls that could provoke a massive second wave of layoffs in the public sector.

The Fed chief said people should never ‘‘bet’’ against the American economy, but he took care not to promise a swift, so-called V-shaped rebound.

‘‘This economy will recover. It may take a while,’’ he said. ‘‘It could stretch through the end of next year. We really don’t know.’’

Powell’s remarks follow his grave warning on Wednesday that the US economy faces lasting harm from the pandemic if the government doesn’t step up. The comments add support to calls for more congressional spending as Democrats push for a fresh $3 trillion in virus aid, on top of a record $2.2 trillion package agreed to in March. On Friday, the House passed the measure, though it has no future in the Republican-led Senate.

Powell can expect questions on the scale and timing of additional fiscal relief when he appears before the Senate Banking Committee on Tuesday. He’ll also be asked to tell Americans what to expect. For all his caution, the Fed chief also had a message of hope.

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‘‘I would just say this: In the long run, and even in the medium run, you would not want to bet against the American economy.’’

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Fed chief warns US economic recovery could stretch through end of 2021 - The Boston Globe
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