- Fed and Congress need to do more in terms of policy: Powell
- ‘Women, children, small businesses to face long-term consequences’
- ‘Post-pandemic economy will be more leveraged to technology’
Federal Reserve Chairman Jerome Powell said the global economy is transforming after the devastating impact of the COVID-19 pandemic, but long-term consequences will be faced by women, children, business owners and displaced workers.
“We’re recovering, but to a different economy,” Powell said during a virtual panel discussion with European Central Bank President Christine Lagarde and Bank of England Governor Andrew Bailey on Thursday.
“It is women who are not by choice out of the labor market. It is the kids who are not getting education they should be getting. It is small businesses with generations of intellectual capital that is being destroyed, and it is just workers who have been out of work for a long period of time and losing their connection to the labor force and losing the life they had,” Powell said.
Powell said the new economy is “more leveraged to technology” and called for extended support to displaced U.S. workers, referring to low-paid public-facing workers in retail and hospitality, who were mainly women and minorities.
The U.S. and Europe are going through new lockdowns and restrictions as a fresh wave of infections takes over the economies. Powell said even with the news of a prospective vaccine, the Fed and Congress need to do more and focus on curbing the resurgence of the virus.
“The main takeaway from me is that even after the unemployment rate goes down and there is a vaccine, there is going to be probably a substantial group of workers who are going to need support as they find their way in a post-pandemic economy because it’s going to be different in some fundamental ways,” Powell said.
Powell highlighted the positive impacts of the virus in terms of the increasing use of technology and advancement in automation. He said these advances will mean good news in the long term but are a source of disruption for the markets as they navigate through the new normal. Markets riding high on the news of the vaccine fell after Powell’s comments on Thursday.