Federal Reserve Chairman Jerome Powell will testify before congressional committees on the new report Tuesday and Wednesday. He is expected to face questioning from lawmakers eager to know how the central bank plans to further support the economy during what is expected to be the steepest economic downturn of the last seven decades.
During a news conference on Wednesday, Powell predicted that the recovery will likely be slow with “well into the millions” of Americans who will not be able to get their old jobs back.
Powell’s downbeat assessment of how long it could take labour market to recover along with other renewed fears about the pandemic’s impact on the economy helped trigger a huge selloff in the market on Thursday with the Dow Jones industrial average falling 1,861.82 points, or 6.9%.
After the market plunge, President Donald Trump sent out a tweet criticizing the Fed and Powell’s comments that a full economic recovery could take a long time.
“The Federal Reserve is wrong so often,” Trump tweeted. “I see the numbers also, and do MUCH better than they do. We will have a very good Third Quarter, a great Fourth Quarter, and one of our best ever years in 2021.”
In its report to Congress, the Fed noted the sharp deterioration that has occurred in the labour market with nearly 20 million jobs lost since February, “reversing almost 10 years of job gains.”
The report said, “The most severe job losses have been sustained by the socioeconomic groups that are disproportionately represented among low-wage jobs.”
Martin Crutsinger, The Associated Press
