Federal Reserve Chair Jerome Powell issued a somber warning to President Trump and Congress that the economic fallout from the pandemic could cause long-lasting damage to the economic well-being of the country.
“The record shows that deeper and longer recessions can leave behind lasting damage to the productive capacity of the economy,” the central banker said Wednesday in a virtual appearance at the Peterson Institute for International Economics.
Venturing beyond his turf of monetary policy, Powell said that greater spending by Congress would be “worth it if it helps avoid long-term economic damage and leaves us with a stronger recovery.”
House Speaker Nancy Pelosi took his comments as an argument in favor of the $3 trillion relief package she aims to pass Friday.
“The American people and experts agree that we must ‘Think Big’ to protect lives and livelihoods during the coronavirus crisis,” she said in a statement. “Not acting is the most expensive course.”
The federal government has already enacted nearly $3 trillion in relief measures. The stakes are unthinkably high, namely at least 18 million jobs.
Senate Majority Leader Mitch McConnell has said that caution and deliberation are warranted before further major fiscal relief.
In response to Powell’s remarks, Trump praised the Fed chairman, who has taken the extraordinary measures of lowering short-term interest rates to zero, launching open-ended quantitative easing, and set up huge lending programs to aid desperate businesses. “He has done a very good job over the last couple of months, I have to tell you that,” Trump said. “Because I have been critical, but, in many ways, I call him my MIP. Do you know what an MIB is? It’s the most improved player.”
Trump, in the same Cabinet Room remarks, disagreed with another top official. He said that “we have to reopen our schools,” contradicting Dr. Anthony Fauci, who said in Tuesday’s Senate health committee hearing that students returning to school in the fall will be at risk of getting the coronavirus, as there is no approved treatment yet.
“Young people are very little affected by this,” Trump said. “We can’t keep going on like this. You’re having bedlam already in the streets. You can’t do this. We have to get it open. I totally disagree with him on schools.”
Washington, D.C., Mayor Muriel Bowser extended the districtwide stay-at-home order until June 8, just two days before the order was scheduled to lift. The district suffered 14 new deaths due to the coronavirus Wednesday, the highest tally since Friday, with a recorded 19 deaths.
A Kaiser Family Foundation analysis published Wednesday found that over 20 million people who lost employer-sponsored healthcare coverage due to mass layoffs throughout the coronavirus pandemic are eligible for subsidized health coverage. About 12.7 million people can get coverage under Medicaid, and nearly 8.5 million are eligible for tax credits to cover the cost of a plan in the Obamacare exchanges.
New York Gov. Andrew Cuomo said Wednesday 14 other states are investigating cases of an obscure inflammatory syndrome in children that doctors believe could be linked to COVID-19. New York has already identified at least 102 cases of the disease, which affects blood vessels and could damage organs. Cuomo said that 14 other states, the District of Columbia, and five European countries have reported cases.
Three children in New York, ages 5, 7, and 18, have died of the illness. The cases reported in New York and New Jersey have a wide range of ages, most often 3 to 18 years old. The symptoms of the toxic shock-like disease differ from those of COVID-19, which presents itself as a respiratory infection. Cuomo said that 60% of the cases in New York tested positive for the coronavirus, while 40% tested positive for the coronavirus antibodies.
“That means children either currently have the virus, or could have had it several weeks ago,” Cuomo said.
A government-backed report in Spain found that the country is far off from reaching herd immunity, bad news given that Spain is one of the nations hardest hit by the pandemic. The national survey using antibody testing found that about 5% of the population, roughly 2 million people, had been infected with the coronavirus, the Financial Times reported.
