June 10, 2020
Statement·Presser·Minutes·Policy
Jerome H. Powell
June 10, 2020 FOMC Press Conference
- The chair said the May employment report was the biggest data surprise anyone can remember, illustrating the high uncertainty about the economic path.
- The chair said the Fed is "not even thinking about thinking about raising rates," and would welcome very low unemployment readings based on the last expansion's experience.
- The chair said the Fed's emergency lending powers are not spending powers and cannot grant money to particular beneficiaries, with direct fiscal support potentially needed for many borrowers.
- The chair said the Fed discussed yield curve control as an open question, reviewing historical and foreign experience, but made no decision on it.
- The chair said the June SEP shows a general expectation of recovery beginning in the second half of this year, but many participants noted multiple reasonably likely paths for the economy.
From the opening statement
Press conference
CHAIR POWELL. Good afternoon, everyone, and thanks for joining us. Our country continues to face a difficult and challenging time, as the pandemic is causing tremendous hardship here in the United States and around the world. People have lost loved ones. Many millions have lost their jobs. There is great uncertainty about the future. At the Federal Reserve, we are strongly committed to using our tools to do whatever we can—and for as long as it takes—to provide some relief and stability, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy.
The most important response to this crisis has come from our health-care workers. And 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. Let me also thank the many other essential workers across the country who have helped meet our basic needs for goods and services in these difficult times.
The virus and the forceful measures taken to control its spread have induced a sharp decline in economic activity and a surge in job losses. Indicators of spending and production plummeted in April, and the decline in real GDP in the current quarter is likely to be the most severe on record. Even after the unexpectedly positive May employment report, nearly 20 million jobs have been lost on net since February, and the unemployment rate has risen about 10 percentage points, to 13.3 percent. As was highlighted by the Bureau of Labor Statistics, this figure likely understates the extent of unemployment; accounting for the unusually large number of workers who reported themselves as employed but absent from their jobs would raise the unemployment rate by about 3 percentage points. The downturn has not fallen equally on all Americans, and those least able to shoulder the burden have been the most affected. In particular, the rise in joblessness has been especially severe for lower-wage workers, for women, and for African Americans and Hispanics.