Fed did not rule out a drop in US GDP by 20%
US, WASHINGTON (ORDO NEWS) — US GDP in the second quarter of 2020 may fall by 20%, and the unemployment rate – increase to 25%, said Sunday in an interview CBS head of the Federal Reserve System ( Fed ) Jerome Powell.
Powell’s forecasts of unemployment were one and a half times greater than those announced at the end of April by the US Department of Labor.
The head of the Fed added that the authorities may have to continue to provide financial support to families for another three to six months to help survive the effects of the economic downturn associated with the pandemic. He also admitted that Congress and the Central Bank would need more effort to support the population.
At the same time, Powell ruled out that the US economy would face a crisis comparable in scale to the Great Depression.
According to the head of the Fed, after the pandemic, the US economy will have a “gradual recovery.” However, it will primarily depend on overcoming the consequences of the medical crisis, reducing the number of cases and opening a vaccine.
In late March, Congress adopted a package of economic support of more than two trillion dollars. Later, US President Donald Trump signed a law to further stimulate the economy by nearly $ 500 billion. In mid-May, the House of Representatives approved a new trillion-dollar package of measures.
American authorities are forced to take unprecedented steps because of the coronavirus pandemic. The United States is still in first place in the world in the number of confirmed cases of infection. According to the latest data from Johns Hopkins University, 1.486 million cases of coronavirus were registered in the country, 89.55 thousand people died, over 268 thousand were cured.
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