WASHINGTON — Jerome H. Powell, the chair of the Federal Reserve, said central bankers had seen the need to use their tools “to their fullest extent” as coronavirus lockdowns shuttered economies around the globe and caused United States unemployment to soar.
“We felt called to do what we could,” Mr. Powell said Friday during a Princeton University webinar.
“We crossed a lot of red lines, that had not been crossed before,” he said. He added that he was comfortable with what the Fed had done given “this is that situation in which you do that, and you figure it out afterward.”
The Fed has taken a variety of actions to support the economy: cutting interest rates to near-zero, rolling out unlimited bond purchases to soothe markets and initiating emergency lending programs to keep credit flowing to businesses and state governments.
Several of those efforts tiptoe into untested territory for the central bank, including programs that lend to medium-sized businesses, buy corporate bonds and purchase debt from states and large cities.
“We work very hard to explain ourselves to the general public,” Mr. Powell said, explaining that the Fed is disclosing information on its lending efforts, and discussing them regularly with lawmakers.
The programs come at a time of dire need. Economists are bracing for a deep plunge in economic output in the second quarter, which runs from April through June, and most predict only a gradual recovery over the remainder of the year. It could be months or years before output returns to its pre-crisis level, and the unemployment rate falls to the 50-year lows that prevailed before the coronavirus lockdowns precipitated a wave of layoffs.
More than 40 million people, about one of every four American workers, have filed for unemployment benefits since mid-March, based on data released this week. A report next Friday is expected to show that the unemployment rate jumped to 19.5 percent in May, based on the median estimate in a Bloomberg survey of economists.
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Mr. Powell noted that the “burdens” of job loss are falling on those least able to bear them, in lower-paid service work, exacerbating economic inequalities.
“Those are the people being laid off, who have the least financial resources,” Mr. Powell said. “It’s falling on women to an extraordinary degree,” and “there’s tremendous inequality” in how the pandemic is affecting the population.
He also voiced concern that if a second round of virus infections hits America, it could lead to a more delayed economic rebound.
“A second wave would really undermine public confidence, and might make for a significantly longer recovery, and weaker recovery,” he said, after explaining that “a full recovery of the economy will really depend on people being confident that it’s safe to go out.”
The Coronavirus Outbreak
Frequently Asked Questions and Advice
Updated May 28, 2020
My state is reopening. Is it safe to go out?
States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people.
What’s the risk of catching coronavirus from a surface?
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
What are the symptoms of coronavirus?
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
How can I protect myself while flying?
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
How many people have lost their jobs due to coronavirus in the U.S.?
More than 40 million people — the equivalent of 1 in 4 U.S. workers — have filed for unemployment benefits since the pandemic took hold. One in five who were working in February reported losing a job or being furloughed in March or the beginning of April, data from a Federal Reserve survey released on May 14 showed, and that pain was highly concentrated among low earners. Fully 39 percent of former workers living in a household earning $40,000 or less lost work, compared with 13 percent in those making more than $100,000, a Fed official said.
Is ‘Covid toe’ a symptom of the disease?
There is an uptick in people reporting symptoms of chilblains, which are painful red or purple lesions that typically appear in the winter on fingers or toes. The lesions are emerging as yet another symptom of infection with the new coronavirus. Chilblains are caused by inflammation in small blood vessels in reaction to cold or damp conditions, but they are usually common in the coldest winter months. Federal health officials do not include toe lesions in the list of coronavirus symptoms, but some dermatologists are pushing for a change, saying so-called Covid toe should be sufficient grounds for testing.
Can I go to the park?
Yes, but make sure you keep six feet of distance between you and people who don’t live in your home. Even if you just hang out in a park, rather than go for a jog or a walk, getting some fresh air, and hopefully sunshine, is a good idea.
How do I take my temperature?
Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications.
Should I wear a mask?
The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing.
What should I do if I feel sick?
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
How do I get tested?
If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested.
How can I help?
Charity Navigator, which evaluates charities using a numbers-based system, has a running list of nonprofits working in communities affected by the outbreak. You can give blood through the American Red Cross, and World Central Kitchen has stepped in to distribute meals in major cities.
While Mr. Powell stressed the Fed’s willingness to act when it comes to emergency lending, he reiterated that the central bank is not looking to cut interest rates into negative territory, something central banks abroad have done in an effort to stimulate their economies.
“Central bankers and economists have been working on the problem of, what can central bankers do when they hit zero,” Mr. Powell said. “The evidence on whether it actually helps is pretty ambiguous,” he said. “You’re crushing down on bank margins, and that makes them lend less.”
He said that Fed policies that worked during the financial crisis — holding rates near-zero and buy longer-term government-backed bonds to lower interest rates — are in the “toolbox” again.
Source: Economy - nytimes.com
