'There's every reason to think' the economy can recover quickly if the government continues issuing aid, Fed chair Jerome Powell says

Ben Winck

Apr 9, 2020, 22:12 IST

'There's every reason to think' the economy can recover quickly if the government continues issuing aid, Fed chair Jerome Powell says

Chip Somodevilla/Getty

A combination of ample fiscal aid, monetary stimulus, and public health planning can place the ailing US economy "back on the road to recovery fairly quickly," Federal Reserve chair Jerome Powell said in a webinar with the Brookings Institution on Thursday.
The economy's stable position before the coronavirus outbreak will aid in ensuring a swift rebound once the virus is contained, he added.
Powell's remarks arrived hours after the central bank announced an additional $2.3 trillion in monetary aid aimed at businesses and state and local governments.
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As economists forecast a deep US recession driven by the coronavirus pandemic, Federal Reserve chair Jerome Powell is optimistic toward the economy's long-term trend.

The central bank chief appeared in a webinar with the Brookings Institution Thursday morning soon after the Fed announced an additional $2.3 trillion in monetary aid. Powell assured the bank would use its monetary policy tools "forcefully, pro-actively, and aggressively" until the economy is on track for a recovery, adding that the programs implemented were made possible through emergency authority.

"Many of the programs we are undertaking to support the flow of credit rely on emergency lending powers that are available only in very unusual circumstances," he said.

The new monetary relief arrives on the back of a $2 trillion stimulus measure that issued critical aid to individual Americans, businesses, and struggling corporations. Legislators have since mulled a new fiscal package as unemployment skyrockets and the outbreak worsens around the country.

Though the Fed chair avoided passing judgment on how Congress should allocate fiscal relief, he noted that cooperation between the central bank, lawmakers, and healthcare officials should keep the economy intact and on track for a bounce-back once the coronavirus is contained.

"There's every reason to think we can be back on the road to recovery fairly quickly and that can be a robust recovery," Powell said.

Much of the government's aid has been geared toward supporting payrolls and keeping Americans hired despite widespread business closures. Jobless claims released Thursday morning showed 6.6 million Americans filing for unemployment benefits in the week ended April 4, bringing the three-week total past 16 million filings.

Despite the sudden spike in joblessness, Powell contended the economy was healthy before the outbreak. The stability seen at the start of the year will drive a swift rebound, and the Fed plans to use all policies available to ensure a smooth transition into another bout of steady growth, he added.

"We entered this turbulent period on a strong economic footing, and that should help support the recovery," Powell said. "In the meantime, we are using our tools to help build a bridge from the solid economic foundation on which we entered this crisis to a position of regained economic strength on the other side."

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