In a speech by Federal Reserve Chairman Jerome Powell on Tuesday, he warned there was a possibility that the U.S. economic recovery would decline if the outbreak of the Covid-19 outbreak was not controlled.
According to him, economic expansion is still far from what was expected. At this early stage he argued that the policies introduced were still inconsistent. Too little support will lead to a weak economic recovery and create difficulties for the household and business sectors.
However, the risk of overdose at this point is much smaller. Yet greater policy action than needed will not make it futile. Recovery will grow faster.
In his speech, Powell did not provide any information on the Fed's next move. On the other hand, members of Congress and Trump also have not yet agreed on further stimulus.
Powell commented that the most undesirable things have been successfully avoided. Government loans for small businesses and assistance for the unemployed have supported recovery but incomplete recovery could lead to economic recession. With the increase in business investment, modest growth in the labor market and declining employment are one of the successes.
Thorough steps need to be taken to ensure that economic growth is under control, otherwise with the increase in Covid-19 cases it could lead to a recession.
