Washington The coronavirus pandemic has plunged the US economy into the worst recession since World War II, according to central bank chief Jerome Powell. There has been no model in recent history for “the scale and speed” of the current downturn, Powell said Tuesday in the US Senate. The pandemic in the United States wiped out a decade’s positive job market developments in just two months, Powell said. The downturn was “far worse than any recession since World War II,” Powell said.
The Federal Reserve (Fed) would continue its emergency measures and keep the key interest rate close to zero until the economy and financial markets stabilized, Powell told a Senate committee. He also urged Parliament to consider further measures to stabilize the economy. “We may have to do more, and so does Congress,” he said.
So far, with the support of both parties, Congress has approved stimulus packages totaling approximately $ 2.7 trillion, which is approximately 10 percent of annual US economic output. The House of Representatives controlled by the Democrats now wants to push through another $ 3 trillion package, but the Senate controlled by Republicans wants to block the package.
Treasury Secretary Steven Mnuchin told the Senate Committee that the US economy will recover in the second half of the year. “I am confident that our country will emerge from this pandemic stronger than ever,” said Mnuchin. Powell, on the other hand, had warned in an interview over the weekend that a complete recovery in the economy could drag on by the end of next year.