US Fed chief says economic slump could stretch through end of 2021

Federal Reserve Chairman Jerome H. Powell said on Sunday that the US economy will recover from the damage inflicted by the coronavirus pandemic but the process could stretch through end of next year.

"Assuming there's not a second wave of the coronavirus, I think you'll see the economy recover steadily through the second half of this year," Powell said in an excerpt of an interview that aired on CBS's "60 Minutes".

"For the economy to fully recover, people will have to be fully confident. And that may have to await the arrival of a vaccine," he said.

The Fed chief also noted that people should not "bet" against the American economy in the long run, even in the medium run.

"This economy will recover. It may take a while. It may take a period of time. It could stretch through the end of next year. We really don't know," he added.

At an online event held by the Washington-based think tank Peterson Institute for International Economics on Wednesday, Powell warned that a prolonged recession and weak recovery from the pandemic could lead to an extended period of low productivity growth and stagnant incomes, the Washington Post reported.

While the economic response has been "both timely and appropriately large," it may not be the final chapter, given that the path ahead is both "highly uncertain" and subject to "significant downside risks," he said.

"The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II," the Fed chief said.

More than 36.5 million Americans have applied for unemployment benefits since the COVID-19 pandemic forced widespread business closures in mid-March, according to the Labor Department.

Meanwhile, Health and Human Services Secretary Alex Azar said on Sunday that it was safe to reopen the economy because half the US counties with covid-19 cases "haven't had a single death."

The United States on Sunday recorded 820 new coronavirus fatalities in the previous 24 hours, bringing the country's total death count near to 90,000, as per Baltimore-based Johns Hopkins University tracker. The country has reported 1,486,376 cases of the contagious infection.

( With inputs from ANI )