Treasury Secretary Steven Mnuchin and the Federal Reserve chair, Jerome H. Powell, offered stark assessments to the Senate Banking Committee. The discussion among them involved the economic damage that the coronavirus outbreak is causing to the US. The hearing happened by video conference and came at a pivotal moment. Congress and White House are beginning to debate the outlines of a second major economic relief bill. The measure would potentially inject trillions of additional taxpayer dollars into the economy of US.
All the discussion comes at a time when some sectors of the economy are closed since mid-March. This reversal of economic fortune caused a level of pain that is hard to capture in words. American lives are upended amid great uncertainty about the future. This is why it is so important to begin bringing people back to work in a safe way.
The U.S top economic policymakers warned lawmakers on Tuesday. This happened while the Congress and the White House grapple with how to restart business activity and how much additional government support is needed. Mr. Mnuchin and Mr. Powell offered a stark assessment of the fragile state of the economy of US, warning of more severe job losses in the coming months. All due to the coronavirus pandemic.
What to expect of the economy of the US
They offered contrasting views of how best to buttress the economy. Mr. Powell suggested that it is necessary to check the support to states and discover what are the businesses that might be needed to avoid permanent economic damage. On the other hand, Mr. Mnuchin suggested that, without an expeditious reopening, the economy might never fully recover.
Mr. Mnuchin’s comments reflect the change in tone among administration officials, who now are trying to shift the economic discussion away from more financial support to allowing states to reopen. In his opening remarks, he said “it is so important to begin bringing people back to work in a safe way.”
Mr. Powell sounded a more cautious tone, explaining that a full recovery will not come until the health crisis is resolved. “The No. 1 thing, is people believing that it’s safe to go back to work, and that’s about having a sensible, thoughtful reopening of the economy, something that we all want — and something that we’re in the early stages of now” He said.
Mr. Powell warned that the economy could face long-term damage if the policy response was not forceful enough. Besides, he reiterated that the economy might need more help to make it through the coronavirus period without lasting scars. Mr. Mnuchin warned that the economy of US may never fully recover if states extend their shutdowns for months without “permanent damage”.