Fed's Jerome Powell says path ahead for US economy likely to be challenging

Jerome Powell speaks to reporters in Washington in March 2020.
Jerome Powell speaks to reporters in Washington in March 2020.PHOTO: REUTERS

WASHINGTON (REUTERS) - The US economic recovery from the novel coronavirus epidemic is set to be challenging and there will be no quick fix, Federal Reserve chairman Jerome Powell said on Friday (June 19) in comments that reinforced his recent cautionary stance.

"We will make our way back from this, but it will take time and work ... The path ahead is likely to be challenging," Powell said in introductory remarks for a discussion by video conference with local leaders in Youngstown, Ohio, on building a resilient workforce.

"Lives and livelihoods have been lost, and uncertainty looms large," he said.

Earlier this week, in two separate appearances before lawmakers in the US Congress, Powell made plain that the United States faces a long overall recovery despite recent encouraging economic data on job gains and consumer spending.

A full recovery, he has said, hinges on the country bringing the epidemic, which has killed more than 118,000 Americans, fully under control.

California, North Carolina and a string of US cities mandated or urged mandatory use of masks on Thursday to get a grip on spiraling coronavirus cases as at least six states set daily records.

Earlier on Friday, Boston Fed president Eric Rosengren also cautioned that the continued spread of the virus could hamper the US economic rebound, and that more fiscal and monetary support will likely be needed.

Powell and numerous other US central bank officials have already called on Congress to provide more government aid.

Congress has allocated nearly US$3 trillion (S$4 trillion) for coronavirus-related economic aid and the Fed has pumped trillions of dollars of credit into the economy to cushion it from the fallout from the epidemic.

But some Republicans have been resistant to doing more quickly, especially given recent positive economic data.