Fed’s Powell Says U.S. Economy Faces Unprecedented Risks
Powell: the US economy can wait &# 171; long period&# 187; poor growth
After the statement of the head of the Fed, futures for US indices compensated for the previously recorded growth
The head of the US Federal Reserve Jerome Powell said on Wednesday that the country could face a “long period” of weak growth and stagnation in terms of revenue, promised to use additional Fed tools if necessary and called for an increase in budget spending.
As Powell noted during an online broadcast for the Peterson Institute for World Economy, the US response has been “swift and decisive” so far, but “it may take some time to recover,” depending on progress in the fight against the coronavirus pandemic..
According to the head of the Fed, the longer the risks in the health sector persist, the more companies and citizens will face financial difficulties, and the most vulnerable categories of the population will suffer especially severe damage. According to a recent Fed survey, 40% of families with incomes less than $ 40,000 a year have at least one person lost their job since February..
“Additional fiscal support can be costly, but it’s worth it if it helps avoid long-term economic damage and provides us with a more confident recovery,” Powell said, effectively calling on Congress to allocate additional funds beyond the already approved anti-crisis packages to the total the amount of about $ 3 trillion.
“This is a choice for our elected representatives, whose powers include tax and expense issues,” he added..
In the morning, e-mini Dow futures are up 163 points, or 0.69 percent, S&The P 500 is up 19.25 points, or 0.67 percent, and the Nasdaq is up 76.75 points, or 0.85 percent. However, after Powell’s speech, futures for US stock indices fell, compensating for the previously recorded growth. Treasury yields have declined, and some interest rate futures are pricing in a small chance that the Fed may turn to negative rates.
In futures trading, such an opportunity began to be considered last week, and on Tuesday President Donald Trump again made an appeal to the Fed, however, a number of representatives of the central bank have recently said that they do not see the need to move rates that are already close to zero into negative territory..
In the morning, e-mini Dow futures are up 163 points, or 0.69 percent, S&The P 500 is up 19.25 points, or 0.67 percent, and the Nasdaq is up 76.75 points, or 0.85 percent.
Meanwhile, pharmaceutical company Mylan NV surged 1.7 percent ahead of trading after the company signed a licensing agreement with Gilead to release remdesivir, which recently received an emergency approval for COVID-19 patients..