Fed chair says US economy faces ‘significant uncertainty’ and fears wider
The Federal Reserve chair, Jerome Powell, warned on Tuesday that the US economy faces “significant uncertainty” in the months ahead, and that the recession that has followed in the wake of the coronavirus pandemic could widen income inequality for minorities and those on lower incomes. Powell said in testimony presented to the Senate banking committee: “Much of that economic uncertainty comes from uncertainty about the path of the disease and the effects of measures to contain it. Until the public is confident that the disease is contained, a full recovery is unlikely.”Powell said recent job losses had fallen hardest on low-income workers, minorities and women and the current downturn further exacerbate income inequality.“If not contained and reversed, the downturn could further widen gaps in economic wellbeing that the long expansion had made some progress in closing,” Powell said. Unemployment has shot up since the coronavirus hit the US but has disproportionately hurt low-income workers, minorities and women. Powell also warned the downturn posed “acute risks to small businesses”. He said: “These businesses are the heart of our economy and often embody the work of generations.”Congress is weighing further temporary relief for businesses and unemployed workers following its approval of the nearly $3tn Cares Act emergency bailout. Powell warned that without that aid, the long-term consequences for the economy could be severe.