FED CHIEF CONTRADICTS TRUMP, PAINTS SUSTAINED RECESSION

The future is bleak for the US economy, contrary to the declarations of US President Trump that the COVID-19 crisis would be followed by an awesome rebound, and the latest official to believe Trump’s sanguine third quarter is none other than Federal Reserve Chairman Jerome Powell, who warned on Wednesday, May 13, 2020, that a sustained recession from pandemic is “possible.”

Powell, who had earned Trump’s goat for not being cavalier with money supply and for being stingy with interest rate cuts, also pressed Trump and Congress to act promptly and generously if they want to prevent strategic economic damage, Christopher Rugaber of the Associated Press (AP) wrote.

He argued that numerous bankruptcies among small businesses and extended unemployment for many people remain a serious risk but noted that government spending through rescue packages, while costly, would be “worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”

Powell spoke a day after House Speaker Nancy Pelosi proposed a $3-trillion aid package that would direct money to state and local governments, households, and health-care workers but Senate Majority Leader Mitch McConnell , a Kentucky Republican , apparently would not act on a matter that is not urgent, echoing the perverse concern of Trump that any new assistance must be anchored on how the previous stimulus package improved the economy. #coronavirusimpact #COVID19