Fed Chair Jerome Powell warned yesterday of the “significant” downside risk in the economy, “especially in the near term” due to resurgence of coronavirus infections. “The concern is that people will lose confidence in efforts to control the pandemic and they will pull back from activities that they think might put them at risk of infection,” he said. “And there are some signs of that already.”
While the ” vaccine news is certainly good news, particularly in the medium term,” Powell said. But “with the virus now spreading as at fast rate, the next few months may be very challenging,”
Fed is “strongly committed to using all out tools” to support the economy. “When the right time comes, and I don’t think that time is yet or very soon, we will put those tools away,” he said. “The recovery is incomplete.”
