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Federal Reserve Chairman Jerome Powell on Friday indicated he was a little less tense about the economy and the coronavirus crisis than he was during the early days of the pandemic, but said he is still concerned about a potential “second wave” of the outbreak.
“Sleeping well? Better than I was in late February and early March, let’s just put it that way,”’ Powell said when asked how he was sleeping by a former Fed vice chairman, Alan Blinder, in a discussion sponsored by Princeton University.
The Fed chairman said there was clearly a risk of a second wave of the virus and said “that would be challenging” for the central bank, but he added that there should be no concern the Fed would be out of ammunition to fight the effects of a renewed outbreak.
“I would worry almost more that a second outbreak would undermine confidence,” and lead to a slower and weaker recovery, Powell said.
See:‘We’re right in the middle of the first wave’ of the COVID-19 pandemic, says WHO official
“A full recovery of the economy will really depend on people being confident that it is safe to go out and safe to engage in a broad range of economy activity,” he said.
Asked whether the Fed’s policies during the pandemic were worsening existing income inequality, Powell replied, “Absolutely not.”
Everything the Fed does is focused on fostering a better labor market, he said.
“The Fed is strongly committed to using our tools to do whatever we can for as long as it takes, to provide some relief and some stability now [and] to support the recovery when it comes, and to try to avoid longer-run damage to people’s lives through long spates of unemployment or to their businesses through unnecessary insolvency,” he said.
The central bank is only “days away” from making its first loans to midsize businesses under the new “Main Street” lending program, Powell said.
The program is designed to lend funds to businesses that can’t access capital markets for credit and were in good shape prior to the lockdown of the economy.
See:List of Fed’s rescue programs to keep credit flowing during the coronavirus pandemic
