By Martin Crutsinger
Federal Reserve Chairman Jerome Powell says the outlook for the U.S. economy is "extraordinarily uncertain" and the success of the recovery effort will depend in large part on the country's ability to contain the spread of the coronavirus.
"A full recovery is unlikely until people are confident that it is safe to re-engage in a broad range of activities," Powell says in testimony he is scheduled to deliver Tuesday in an appearance with Treasury Secretary Steven Mnuchin before the House Financial Services Committee.
In the testimony released Monday by the Fed, Powell repeats a pledge that the central bank will keep interest rates at their current ultra-low levels until it is sure the economy has weathered the pandemic crisis.
His comments come as parts of the country are experiencing a surge in coronavirus cases that have prompted governors to backtrack some of their steps to reopen their states' economies.
Powell said the re-opening occurred sooner than expected, with hiring and consumer spending both picking up in May.
"While this bounceback in economic activity is welcome, it also presents new challenges, notably, the need to keep the virus in check," Powell said.
Both Powell and Mnuchin were expected to face questions from lawmakers on topics including how much more support Congress will need to provide to bolster the economy.
That question has gained new urgency as the surge in cases in states including California, Texas and Florida have raised concerns about possible setbacks to efforts to rebound from the downturn that was brought on by measures to control the spread of the virus.
"The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus," Powell says in the prepared remarks, stressing that a successful outcome will depend on policy actions taken by all levels of government.
The Trump administration has indicated it would be willing to back further economic support on top of the nearly $3 trillion in support already approved. But Democrats and Republicans are split on the size of any new rescue package and what elements it should contain.
The Fed has slashed its key interest to near zero and pumped $2 trillion into purchases of Treasury securities and mortgage-backed securities plus providing additional support through 11 special programs to facilitate the functioning of credit markets for businesses and consumers and borrowing by state and local governments.
"We expect to maintain interest rates at this level until we are confident that the economy has weathered recent events and is on track to achieve our maximum employment and price-stability goals," Powell said.
President Donald Trump has fired one of two Democratic members of the U.S. Surface Transportation Board to break a 2-2 tie ahead of the board considering the largest railroad merger ever proposed.
Ford is recalling more than 355,000 of its pickup trucks across the U.S. because of an instrument panel display failure that’s resulted in critical information, like warning lights and vehicle speed, not showing up on the dashboard.
Nvidia reported a 56% increase in second-quarter revenue and a 59% rise in net income compared to a year ago.
The Rev. Al Sharpton is set to lead a protest march on Wall Street to urge corporate America to resist the Trump administration’s campaign to roll back diversity, equity and inclusion initiatives. The New York civil rights leader will join clergy, labor and community leaders Thursday in a demonstration through Manhattan’s Financial District that’s timed with the anniversary of the Civil Rights-era March on Washington in 1963. Sharpton called DEI the “civil rights fight of our generation." He and other Black leaders have called for boycotting American retailers that scaled backed policies and programs aimed at bolstering diversity and reducing discrimination in their ranks.
President Donald Trump's administration last month awarded a $1.2 billion contract to build and operate what's expected to become the nation’s largest immigration detention complex to a tiny Virginia firm with no experience running correction facilities.
Netflix CEO Ted Sarandos claims audiences don't want to watch Netflix movies in theaters, but that seems not to be the case recently.
Chipmaker Nvidia is poised to release a quarterly report that could provide a better sense of whether the stock market has been riding an overhyped artificial intelligence bubble or is being propelled by a technological boom that’s still gathering momentum.
Cracker Barrel said late Tuesday it’s returning to its old logo after critics — including President Donald Trump — protested the company’s plan to modernize.
Low-value imports are losing their duty-free status in the U.S. this week as part of President Donald Trump's agenda for making the nation less dependent on foreign goods. A widely used customs exemption for international shipments worth $800 or less is set to end starting on Friday. Trump already ended the “de minimis” rule for inexpensive items sent from China and Hong Kong, but having to pay import taxes on small parcels from everywhere else likely will be a big change for some small businesses and online shoppers. Purchases that previously entered the U.S. without needing to clear customs will be subject to the origin country’s tariff rate, which can range from 10% to 50%.
Southwest Airlines will soon require plus-size travelers to pay for an extra seat in advance if they can't fit within the armrests of one seat. This change is part of several updates the airline is making. The new rule starts on Jan. 27, the same day Southwest begins assigning seats. Currently, plus-size passengers can pay for an extra seat in advance and later get a refund, or request a free extra seat at the airport. Under the new policy, refunds are still possible but not guaranteed. Southwest said in a statement it is updating policies to prepare for assigned seating next year.
