Economic recovery non-starter

The most important data for the United States economy right now are the "medical metrics" around the coronavirus pandemic, says Federal Reserve Chairman Jerome Powell.

In an interview with US TV network CBS' 60 Minutes news programme broadcast on Sunday night, Powell outlined the likely need for three to six more months of government financial help for firms and families.

He repeatedly returned to health issues as being central to the success of a US economic reopening, calling on Americans to "help each other through this" by adhering to social-distancing rules as state and local governments begin to lift restrictions on social and economic activities.

  alJazeera

Pie in the sky, Jerome.

"If we are thoughtful and careful about how we reopen the economy so that people take these social distancing measures forward and try to do what we can not to have another outbreak ... then the recovery can begin fairly soon," Powell said.

In other words, forget about it.

"Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year," he said.

Nice try, Jerome. We're all assuming there WILL be a second wave.

As Congress debates possible further economic relief, Powell has stretched the limits of typical central bank commentary, directly calling for more fiscal spending. In Sunday's interview, he even urged people to wash their hands and wear masks to aid the recovery.

Masks are for wimps. Doesn't he know that?

Under the best of circumstances it will be a long road, Powell said, with additional job losses likely through June, a rebound that takes time to "gather steam" and some parts of the economy like the travel and entertainment industries possibly under pressure until there is a vaccine. The economic devastation already has been severe. Powell said unemployment may hit 25 percent before it begins to fall and gross domestic product may contract at an annualised rate of perhaps 20 percent in the April through June period.

[...]

"For the economy to fully recover people will have to be fully confident and that may have to await the arrival of a vaccine."

And not one produced in "warp speed" that "may not be safe and effective."

...but hey, do what you want...you will anyway.