Fox Business: Fed's Powell Says US Economy Faces 'Whole New Level' of Uncertainty Amid Coronavirus Pandemic

May 21, 2020

Article by Megan Henney in Fox Business

Federal Reserve Chairman Jerome Powell said Thursday the U.S. economy is facing an unprecedented level of uncertainty as a result of the coronavirus outbreak, which has triggered the worst economic catastrophe since the Great Depression.

“We are now experiencing a whole new level of uncertainty, as questions only the virus can answer complicate the outlook," Powell said Thursday during prepared remarks for a virtual Fed Listens event.

In the nine weeks since the economy came to a grinding halt, nearly 39 million Americans have lost their jobs, a development that Powell described as "tragic and heartbreaking." In February, before the virus gained foothold in the U.S., unemployment was at a half-century low of 3.5 percent.

The Fed responded to the crisis by taking a range of extraordinary actions to support the economy, including slashing interest rates to near-zero, purchasing an unlimited amount of Treasurys (a practice known as quantitative easing) and launching crisis-era lending facilities to ensure that credit flows to households and businesses. It has also said it will buy corporate bonds and lend to states and cities.

In the past eight weeks, the Fed has pumped nearly $2.9 trillion into the economy, and its balance sheet has expanded to $7 trillion, a record.

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