Federal Reserve Chairman Jerome Powell said Thursday the country could already be in a recession, but that it was unlike a typical downturn because the economy was so strong before the coronavirus pandemic sent the markets into a tailspin and unemployment soaring.
“We may well be in a recession. But I would point to the difference between this and a normal recession. There is nothing fundamentally wrong with our economy. Quite the contrary. We are starting from a very strong position,” Powell told the “Today” show.
Asked about President Trump’s contention that the measures could end by Easter, so that churches could be packed and the economy could begin recovering, the Federal Reserve chair said the course of the virus should determine when restrictive measures should be eased.
“The virus is going to dictate the timetable,” Powell told host Savannah Guthrie.
“The sooner we get through this period, and get this virus under control, the sooner the recovery can come.”
His comments on the virus echoed those made Wednesday night by Dr. Anthony Fauci, one of the top scientists on the administration’s coronavirus task force.
“You’ve got to be realistic and you’ve got to understand that you don’t make the timeline. The virus makes the timeline,” Fauci told CNN.
Powell also explained the reasoning behind the feds’ move to slash interest rates and buy securities to shore up the financial markets.
“The Federal Reserve is working hard to support you now. Our policies will be very important when the recovery does come, to make that recovery as strong as possible,” he said.
Asked about criticism that the Fed had used up all the arrows in its quiver to ameliorate the financial side of the crisis, he said the reserve bank had plenty of weapons left.
“When it comes to lending, we are not going to run out of ammunition. That just doesn’t happen,” he said.
Powell is a frequent target for the president, who regularly slams him for not acting as fast as Trump would like to cut interest rates.
In the interview, however, he stressed the Fed’s independence from political interference.
“My colleagues and I here are totally focused on our mission of serving the American people,” he said. “We try to do the absolutely best in a way that is completely nonpolitical and nonpartisan.”