“Recent news on the vaccine front is very positive for the medium term. For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy in different groups,” he added. “It remains difficult to assess the timing and extent of the economic implications of these developments with any degree of confidence.”
Powell’s comments are the most detailed yet on how the possible arrival of a vaccine could influence the Fed’s outlook and the evolution of a recovery that the central bank chief acknowledges is slowing down.
That, in turn, could form opinions on how much more fiscal support might be needed to help families and businesses close the gap between the current recession and the post-pandemic economy.
Vaccination could begin before Christmas, Health Secretary Alex Azar said on Monday.
In separate testimony to deliver at the same hearing, Treasury Secretary Steven Mnuchin stated that the economy has made “remarkable progress” in regaining ground lost due to the pandemic, and that any new aid from the government should be targeted. to “struggling workers and small businesses” and not spread widely in the economy.
Mnuchin recently said the Fed should shut down several emergency loan programs and suggested that the remaining $ 455 billion for those lines be reallocated to such a program.
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With the vaccine on the horizon, some analysts say they expect a solid rebound in the economy in the coming months as Americans are vaccinated and broad immunity to the coronavirus is achieved.
However, Powell assured that the fate of the economy will continue to depend on the success of this process and until then the impact of the pandemic will continue, and will affect particularly strongly on women, minorities and those who work in the service sector.
“A full economic recovery is unlikely until people are confident that it is safe to return to a wide range of activities,” Powell said.