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Federal Reserve Chief Warns Long Downturn Would Mean Severe Damage

Associated Press

   WASHINGTON - Federal Reserve Chairman Jerome Powell warned Tuesday that
   the U.S. economy faces a deep downturn with "significant uncertainty"
   about the timing and strength of a recovery. He cautioned that the
   longer the recession lasts, the worse the damage that would be
   inflicted on the job market and businesses.

   In testimony to Congress, Powell stressed that the Fed is committed to
   using all its financial tools to cushion the economic damage from the
   coronavirus. But he said that until the public is confident the disease
   has been contained, "a full recovery is unlikely." The chairman warned
   that a prolonged downturn could inflict severe harm especially to
   low-income workers who have been hit hardest.

   Powell is delivering the first of two days of semi-annual congressional
   testimony, on Tuesday to the Senate Banking Committee before addressing
   the House Financial Services Committee on Wednesday.

   "The longer the downturn lasts, the greater the potential for
   longer-term damage from permanent job loss and business closures,"
   Powell said. "Long periods of unemployment can erode workers' skills
   and hurt their job prospects."

   He noted that the pandemic poses "acute risks" for small businesses.

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