Federal Reserve Chair Jerome Powell warned on Sunday that the nation’s unemployment rate could reach 25 percent because of the coronavirus pandemic.
“Those numbers sound about right for what the peak may be,” Powell told CBS.
His comments came after the central bank released a survey showing that one in five Americans lost their jobs in March.
Powell hoped that the economy would come out of the recession by the end of the year, but warned that a second coronavirus outbreak could change that.
“This economy will recover,” he said. “We’ll get through this. It may take a while…. It could stretch through the end of next year. We really don’t know.”
The central bank has taken a number of measures to aid the economy, including cutting interest rates, creating lending programs worth trillions of dollars and bailing out state and city governments.
“There’s really no limit to what we can do with these lending programs,” Powell said. “There’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to.”
The unemployment rate hasn’t been this high since the Great Depression, but Powell is hopeful the economy can bounce back faster than it did in the 1930’s.
“When the Depression, well, when the crash happened and all that, the financial system really failed,” Powell said. “Here, our financial system is strong.”
He added that Congress will have to spend more money to prevent long-lasting damage. Powell said the way to do that is to “keep workers in their homes, keep them paying their bills.”
“Keep families solvent so that when this comes, we come out the other end of this, we’re in a position to have a strong recovery,” he said.
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