Federal Reserve Chairman Jerome Powell warned on Wednesday that in the second quarter the US economy is going to contract to an “unprecedented” level, on a day in which the data for the first quarter indicated a severe blow to the coronavirus pandemic to the economy. Read Price of the dollar today Wednesday April 29, 2020 at the close, exchange rate
“Economic activity is going to drop at an unprecedented rate in the second quarter,” Powell said. “The American economy may need more support,” he added.
The Federal Reserve warned that the coronavirus pandemic poses a “considerable” risk to the economy and decided this Wednesday to keep its guideline rate at a level between zero and 0.25%.
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Powell noted that both “the depth and duration of the economic downturn are extremely uncertain and will depend largely on how quickly the virus is brought under control.”
The United States is the country where more people have died from the new coronavirus, with more than 58,000 deaths from this respiratory disease. The crisis “will weigh heavily on economic activity, employment and inflation in the short term, and poses a considerable risk to the forecast for the economy in the medium term,” the Fed’s Monetary Policy Committee concluded ( FOMC) after a two-day meeting.
The US issuer said he is “committed” to using his entire arsenal to shore up the economy in these difficult times.
This Wednesday, the Commerce Department data showed that the US economy contracted 4.8% in the first quarter over the fourth of last year, marking the most pronounced decrease since the Great Recession of the last decade.
The measurement used in the United States compares a quarter with the previous one and makes a projection on the evolution in the year, if the current growth rate is maintained.
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Disruptions to economic activity here and abroad have significantly affected financial conditions and reduced the flow of credit to American households and businesses, “the Fed said.
The Fed’s monetary committee said it will maintain interest rate levels until it is “confident” that the economy has managed to weather recent events and the country “is on track to achieve maximum employment and stability goals for prices”.
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