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Covid-19 resurgence poses challenges to economic recovery: Fed chief

IANS | December 01, 2020 12:22 PM

WASHINGTON: US Federal Reserve Chairman Jerome Powell said that the continuing Covid-19 resurgence across the country could pose challenges to the economic recovery in the next few months.

"As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check, " Xinhua news agency quoted Powell as saying in his prepared testimony, which was posted on the Fed's website on Monday, for a congressional hearing scheduled on Tuesday.

"The rise in new Covid-19 cases, both here and abroad, is concerning and could prove challenging for the next few months.

"A full economic recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities, " Powell said.

While recent news on the vaccine front is very positive for the medium term, "significant challenges and uncertainties remain" for now, including timing, production and distribution, and efficacy across different groups, Powell noted.

"It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence, " he said.

The Fed chief also said that the overall rebound in household spending is partly due to federal stimulus payments and expanded unemployment benefits, which had expired and provided essential support to many families and individuals.

Powell's testimony came as Democratic and Republican lawmakers have been deadlocked for months over the size and scope of the next round of fiscal support.

"We are committed to using our full range of tools to support the economy and to help assure that the recovery from this difficult period will be as robust as possible on behalf of communities, families, and businesses across the country, " he said.

On Tuesday, the Johns Hopkins University's Center for Systems Science and Engineering revealed that the overall Covid-19 caseload and death toll in the US stood at 13, 536, 216 and 267, 987, respectively.

The two tallies are the highest in the world. which makes the country the worst-hit

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