WASHINGTON - U.S. Federal Reserve Chair Jerome Powell and Treasury chief Steven Mnuchin are painting a bleak picture of the economic devastation the coronavirus pandemic has wrought on the country, but they hold out hope that a raft of loans and assistance to families and businesses will provide relief in the coming months.
Both are testifying Tuesday remotely before he Senate Banking Committee.
Powell said in prepared remarks that the pandemic has caused “a level of pain that is hard to capture in words.
“All of us are affected, but the burdens are falling most heavily on those least able to carry them,” he said. “It is worth remembering that the measures taken to contain the virus represent an investment in our individual and collective health. As a society, we should do everything we can to provide relief to those who are suffering for the public good.”
The central bank chief said, “The scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II.” About 36.5 million U.S. workers have been laid off from jobs and have sought unemployment compensation as the world’s largest economy has plunged into a recession.
“This precipitous drop in economic activity has caused a level of pain that is hard to capture in words,” Powell said, “as lives are upended amid great uncertainty about the future.”
The Fed lowered its benchmark interest rate to near zero in March. Powell promised that the Fed expects “to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum-employment and price-stability goals.”
FILE - Treasury Secretary Steve Mnuchin speaks with reporters about economic impacts of the coronavirus outside the White House, March 29, 2020, in Washington.
Mnuchin, also testifying remotely, echoed Powell’s concerns about the U.S. economy in his prepared remarks, saying, “This disease is impacting families and communities across the nation. Through no fault of their own, the American people are also enduring economic challenges.”
But he said that thanks to efforts of medical professionals throughout the U.S., “I am confident that our nation will emerge from the pandemic stronger than ever before.”
He said that hundreds of billions of dollars in grants and loans to families and businesses have been doled out already to ease the country’s economic burden from the pandemic.
“We are sympathetic to hardworking Americans and businesses enduring tremendous challenges due to the COVID-19 pandemic,” Mnuchin said. “We have had to take unprecedented steps to shut down significant parts of the economy in the interest of public health.”
He said that as a result, “We are continuing to see large unemployment and other negative indicators. It is important to realize that the large numbers represent real people.”
But he said, “As we listen to medical experts, we are optimistic about the progress being made on vaccines, antiviral therapies, and testing. Working closely with governors, we are beginning to open the economy in a way that minimizes risks to workers and customers. We expect economic conditions to improve in the third and fourth quarters.”
The U.S. coronavirus death toll now tops 90,000, by far the biggest national total across the globe, with 143,000 expected to die by early August.
But Mnuchin declared, “Together we will destroy the COVID-19 virus and our country will emerge from the pandemic stronger than ever.”