November 24, 2020

Seven weeks into coronavirus lockdowns, Fed has a new, darker message

One Thursday morning seven weeks ago, Federal Reserve Chair Jerome Powell made a rare appearance on NBC’s “Today Show” to offer a reassuring message to Americans dealing with economic fallout from measures to contain the coronavirus outbreak.

There is “nothing fundamentally wrong with our economy,” Powell told viewers, while pointing out the U.S. central bank’s outsized ability to take on lending risk and provide a financial “bridge” over the temporary economic weakness the country was experiencing.

Speaking after the Fed cut interest rates to near zero and rolled out a plan to backstop credit for small- and mid-sized companies, Powell emphasized the first order of business was to get the virus under control.

“The sooner we get through this period and get the virus under control, the sooner the recovery can come,” said Powell, echoing remarks made the day before by Anthony Fauci, a top U.S. health official helping to coordinate the federal government’s response to the coronavirus crisis.

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