Federal Reserve Chairman Jerome Powell has acknowledged that the coronavirus pandemic has permanently altered the United States economy.
Speaking during a virtual Conversation with the Chair session, Powell said the economy wouldn’t be going back to the pre-pandemic levels, and the central bank should adapt to the changes.
However, Powell didn’t highlight any planned policy changes by the central bank regarding boosting the economy.
“We’re not simply going back to the economy that we had before the pandemic. We need to watch carefully as the economy continues to get through the pandemic and try to understand the ways that the economy has changed and what the implications are for our policy,” said Powell.
He further expressed uncertainty regarding the impact of the delta variant on the economy as more sectors continue reorganizing themselves. In recent months, the Covid-19 delta variant has taken center stage, threatening most economic gains.
According to Powell, despite the ongoing vaccination, the health crisis is still around, and authorities will be keen to monitor how the economy is impacted.
The Fed chair noted that despite the slowing down in vaccination and increasing infections, the institution’s view on economic recovery is still on course.
Boost from technological investments
Powell added that the economy has the potential for further growth considering that most companies have made necessary changes like technology investments. He notes that the investments present an opportunity for further growth in jobs. At the same time, Powell said that automation might render a section of citizens jobless.
At the onset of the pandemic, the U.S. economy came to a halt, with the stock market crashing to historical lows. However, the economy has made a swift recovery, with Powell attributing it to policy measures by Congress.
Notably, during 2021 Q2 the U.S. economy recorded significant growth since the third quarter of last year, when the economy bounced back, surging 33.4%.
Watch the video: Powell: ‘We aren’t going back to the economy we had before the pandemic’