Technological advances are generally positive for long-term societies, Powell said, adding that they create disruptions on a short-term basis, and since the market is embedded with the new normal, the pain is not evenly distributed.
For example, it is possible that low-wage workers, as well as employers, who require face-to-face interactions such as retail or rest restaurant rent workers, will shoulder most of the burden of this shift. These groups, which have strong attitudes toward women and minorities, have already been among those most affected by the epidemic, Powell said.
In general, inequality lags behind the economy, the central banker said.
“Even after the unemployment rate goes down and vaccinations are given, there will be a potentially significant group of workers who will need support as they find their way into the post-epidemic economy, because it will be different,” Powell said.
More work needs to be done
Powell has long said the economy could need more stimulus from both the government and the central bank to get through the crisis. He echoed that sentiment again on Thursday.
“My understanding is that we need to do more and Congress needs to do more,” he said.
While the possibility of a vaccine is newsworthy, many questions remain, including the resurgence of the virus worldwide.
“The main risk we see today […] There is a greater prevalence of the disease here in the United States. “Some states have resumed their epidemics to prevent this,” he said.
Powell’s remarks weakened U.S. stocks. The market has been throbbing with hopes of a vaccine recently.
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