Jerome Powell will be on CBS' 60 Minutes this evening. The New York Times has a preview.

“This economy will recover; it may take a while,” Mr. Powell said in a preview of the CBS program “60 Minutes” that aired Sunday morning. “It may take a period of time, it could stretch through the end of next year, we don’t really know.”

“Assuming that there’s not a second wave of the coronavirus, I think you’ll see the economy recover steadily through the second half of this year,” he said. “For the economy to fully recover, people will have to be fully confident, and that may have to await the arrival of a vaccine.”

No Shocker 

This is not a shocker although it is unusual for the Fed chair to be this blunt. 

The message is warranted as the economic data has been nothing but grim.

  1. May 8: Over 20 Million Jobs Lost As Unemployment Rises Most In History
  2. May 15: Retail Sales Plunge Way More Than Expected
  3. May 15: Industrial Production Declines Most in 101 Years

Fed Promotes More Free Money

The Fed cannot directly give money away so that burden falls on Congress. 

In additional unusual moves, Fed Chair Jerome Powell and Minneapolis Fed President Neel Kashkari both asked for Congressional Action.

This is a sign of panic. I commented on May 14, Panic Sets In: Fed Promotes More Free Money.

The Fed seldom steps in with fiscal recommendations, especially more deficit increasing measures. 

Mish