Powell Says Federal Reserve Crossed Red Lines to Help Economy

“We work very hard to explain ourselves to the general public,” Mr. Powell said, explaining that the Fed is disclosing information on its lending efforts, and discussing them regularly with lawmakers.

The programs come at a time of dire need. Economists are bracing for a deep plunge in economic output in the second quarter, which runs from April through June, and most predict only a gradual recovery over the remainder of the year. It could be months or years before output returns to its pre-crisis level, and the unemployment rate falls to the 50-year lows that prevailed before the coronavirus lockdowns precipitated a wave of layoffs.

More than 40 million people, about one of every four American workers, have filed for unemployment benefits since mid-March, based on data released this week. A report next Friday is expected to show that the unemployment rate jumped to 19.5 percent in May, based on the median estimate in a Bloomberg survey of economists.

Mr. Powell noted that the “burdens” of job loss are falling on those least able to bear them, in lower-paid service work, exacerbating economic inequalities.

“Those are the people being laid off, who have the least financial resources,” Mr. Powell said. “It’s falling on women to an extraordinary degree,” and “there’s tremendous inequality” in how the pandemic is affecting the population.

Article source: https://www.nytimes.com/2020/05/29/business/economy/powell-federal-reserve-economy-coronavirus.html