Fed’s Powell says an economic recovery could take until the end of 2021 — but doesn’t see a full-blown depression taking hold

• While economic indicators point to the worst recession in nearly a century, Federal Reserve Chair Jerome Powell doesn't expect a prolonged, Great Depression-style slump.
• The central bank chief told "60 Minutes" he sees the second quarter bringing GDP down as much as 20% to 30%, while unemployment will likely peak around 25%.
• Rapid government and central bank aid helped avoid a depression, Powell said, adding the Fed will issue relief as long as necessary to bridge the virus threat.
• Powell sees growth resuming as soon as the third quarter, but uncertainty surrounding the coronavirus' trajectory could push a full recovery to the end of 2021.
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Federal Reserve Chair Jerome Powell sees key indicators hitting their bleakest levels since the 1930s, but doesn't expect the US to slide into another economic depression.

The second quarter will likely show the brunt of the coronavirus pandemic's fallout, the Fed chief told "60 Minutes" in an interview aired Sunday. Gross domestic product shrinkage "could easily be in the 20s or 30s" percentage, while the unemployment rate could peak between 20% and 25%, he added.

When asked if the US is on its way to a Great Depression-style slump, Powell said he doesn't see that as "a likely outcome at all." The central bank chief noted the current downturn was driven by an external event, and that the financial system has withstood recent stresses. He also praised governments and monetary authorities around the world for issuing relief with historic speed and creativity.

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Powell estimates the economy can return to growth in the third quarter. However, uncertainty around the virus' trajectory and potential treatments could push a full rebound well into 2021, he added.

"In the long run, and even in the medium run, you wouldn't want to bet against the American economy. This economy will recover," Powell said. "It may take a while. It may take a period of time. It could stretch through the end of next year."

Trillions of dollars in fiscal and monetary aid played a critical role in stabilizing the US, the central bank chief said. The Fed has already implemented a collection of lending programs, rate cuts, and capital injections to boost liquidity and keep companies afloat. Some economists fear the central bank may have exhausted its policy salvo too quickly, but Powell said the bank is "not out of ammunition by a long shot."

Even if the economy is stuck in a weaker state for more than a year, the Fed chair is optimistic toward its long-term path. He cited the nation's "dynamic economy" and technological innovations as giving him hope, and guaranteed the central bank is committed to issuing economic relief as long as necessary to bridge the downturn.

"We'll get back to the place we were in February; we'll get to an even better place than that. I'm highly confident of that. And it won't take that long to get there," Powell said.

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