April 29, 2020
Jerome H. Powell
April 29, 2020 FOMC Press Conference
- The chair said next week's jobs report is expected to show the unemployment rate has surged into double digits from 50-year lows two months ago.
- The chair said the Fed's credit policies are not subject to a specific dollar limit and can be expanded or new ones created as appropriate.
- The chair said the corporate credit facilities are near being finalized and will be operating fairly soon, while the Main Street facility will be close to issuing a new term sheet after receiving a couple thousand comments.
- The chair said the Fed cannot lend to insolvent companies and can only make loans secured to its satisfaction under section 13(3) of the Federal Reserve Act.
- The chair said the economy will likely need more support from all of us, including fiscal support, for the recovery to be robust, and that policies protecting workers, businesses, and households from avoidable insolvency will be key.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon. Thanks for joining us today. I would like to begin by acknowledging the tragic loss and tremendous hardship that people are experiencing both here in the United States and around the world. The coronavirus outbreak is first and foremost a public health crisis, and the most important response is coming from those in the front lines in hospitals, emergency services, and care facilities. On behalf of the Federal Reserve, let me express our sincere gratitude to those dedicated individuals who put themselves at risk, day after day, in service to others and to our nation.
The forceful measures that we as a country are taking to control the spread of the virus have brought much of the economy to an abrupt halt. Many businesses have closed, people have been asked to stay home, and basic social interactions are greatly curtailed. People are putting their lives and livelihoods on hold, at significant economic and personal cost. All of us are affected, but the burdens are falling most heavily on those least able to carry them. It is worth remembering that the measures we are taking to contain the virus represent an investment in our individual and collective health. As a society, we should do everything we can to provide relief to those who are suffering for the public good.
While many standard economic statistics have yet to catch up with the reality we’re experiencing, it’s clear that the effects on the economy are severe. Millions of workers are losing their jobs: Next week’s jobs report is expected to show that the unemployment rate, which was at 50-year lows just two months ago, has surged into double digits. Household spending has plummeted as people stay home, and measures of consumer sentiment have fallen precipitously. Hotels, airlines, restaurants, department stores, and other retailers have been particularly hard hit. Manufacturing output fell sharply in March and is likely to drop even more rapidly this month, as many factories have temporarily closed. Overall, economic activity will likely drop at an unprecedented rate in the second quarter. Inflation is also being held down, reflecting weaker demand as well as significantly lower energy prices.