The head of the Federal Reserve yesterday offered a grim assessment of how quickly the U.S. economy will recover from its pandemic-induced recession, suggesting that millions of people could remain out of work for an extended period as central bank officials estimated unemployment will be at 9.3 percent by the end of 2020, the New York Times reported. The Fed chair, Jerome H. Powell, said the labor market might have “hit bottom” after recording a 14.7 percent unemployment rate in April, but made clear that it was too soon to know for certain. “This is the biggest economic shock, in the U.S. and the world, really, in living memory,” Powell said after the Fed’s two-day policy meeting, during which it left rates unchanged. “We went from the lowest level of unemployment in 50 years to the highest level in close to 90 years, and we did it in two months.” Powell did not suggest a rapid return to the type of economic growth and low joblessness that defined the 11-year expansion, even as states allow restaurants, offices and salons to reopen. Instead, he said, “there is great uncertainty” about the future given unknowns about the coronavirus and whether people will feel comfortable resuming their previous day-to-day activities absent a vaccine. The Fed will do “whatever we can, and for as long as it takes,” to support the recovery, he said, including buying large quantities of bonds and leaving interest rates near zero for a long time. His central bank colleagues projected no increase to borrowing costs through at least 2022, and Powell said the Fed was “not even thinking about thinking about raising rates.”
