Federal Reserve Chairman (The Fed) Richard Clarida on Wednesday commented on the economic development of the United States (U.S.). Based on his research, he argues that the U.S. economy needs another year or more to return to economic performance as before the pandemic.
Clarida noted that the policy measures implemented by the Fed and Congress have helped stimulate economic activities such as increased consumption and services. However, the spread of the Covid-19 pandemic has had a profound effect on the economy, so it is expected that another year will be needed for GNP to fully recover at the peak of 2019.
Clarida's speech comes ahead of the third quarter GDP report which is expected to show an annual growth of more than 30%. Yet the U.S. unemployment rate is expected to remain high despite the fact that 11.4 million jobs have been created.
Clarida also added that, with the measures implemented, the Fed administration will raise interest rates as soon as the unemployment rate falls but pay more attention to the movement of inflation first.
Finally, the Fed sees economic activity continue to grow gradually but future prospects remain uncertain.
