Fed Chairman Says Economy Reopening Happened "Sooner Than Expected"
Federal Reserve Chairman Jerome Powell said the reopening of the US economy happened sooner than the Fed expected, according to the Wall Street Journal.
Mr. Powell also stated that the central bank was not expecting a resurgence of spending and hiring so soon either. However, he reiterated that lifting restrictions too much could lead to significant downside and regression for the US.
“We have entered an important new phase and have done so sooner than expected,” Mr. Powell said in testimony prepared for delivery Tuesday morning before a congressional committee. “While this bounce back in economic activity is welcome, it also presents new challenges—notably, the need to keep the virus in check.”
Chairman Powell and Treasury Secretary Steven Mnuchin are scheduled to testify before Congress tomorrow. Both are required to appear before the House Financial Services Committee to report on the $2 trillion relief package approved by Congress in March. Congressional leaders specifically want to hear about the status of the $450 billion that the Treasury was given to cover losses in emergency lending programs run by the Fed.
The Fed has developed nine different emergency lending programs to aid different entities such as companies of all sizes and state and local governments.
“We are strongly committed to using these programs, as well as our other tools, to do what we can to provide stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy,” Mr. Powell said in his prepared testimony.