“The current public health crisis will weigh heavily on economic activity, employment and inflation in the short term, and poses considerable risks to the economic outlook in the medium term,” the central bank said in a statement.
Despite the economy starting to recover after stopping during the pandemic’s closure in the spring, the level of economic activity was still well below levels since the beginning of the year, the Fed said.
“What the data shows is that it appears that the pace of recovery has slowed since cases began that surge in June,” Federal Reserve Chairman Jerome Powell said at the press conference on Wednesday.
“Overall, the data appears to point to a slowdown in recovery.”
Powell re-emphasized that much of the burden of the pandemic crisis was the responsibility of minorities and women, as well as low-wage workers.
While the Congressional stimulus package in the spring helped keep businesses and people in their homes open, the United States is still in the midst of an unemployment crisis and not all of the lost jobs are expected to return. That means some people will need support even when the economy recovers, Powell said. Still, much remains to be done in terms of fiscal and monetary stimulus, Powell said.
US stocks rose higher following Powell’s comments and ended the day higher.
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