Dark clouds are likely to remain clung to the economy of the United States (US). In fact, recovery is still far away and the economy could shift toward danger.
This awful figure was repeated by Federal Reserve Chair Jerome Powell. At the yearly gathering of the National Association for Economics and Business, he said the expansion in crown contaminations was again the fundamental factor.
“(The second flood of crown) fundamentally restricts financial movement, also the unfortunate impact on life and prosperity,” said Powell, cited from CNN International Wednesday (7/10/2020).
“Dealing with this danger as extension proceeds will require master clinical direction, including wearing covers and social separating measures.” Powell also asked for more fiscal stimulus. This is important, he said, if the economy is to recover.
According to him, providing a lot of stimulus is lower risk than issuing an insufficient stimulus. As it is known, the US is currently debating the amount of stimulus to be given, whether it is according to the wishes of the DPR as much as US $ 2.2 billion or as President Donald Trump’s government wants US $ 1.5 billion.
“Too little support will lead to a weak recovery, creating unnecessary difficulties for businesses and households,” he wrote Reuters.
Quoting Trading Economics, the US economy on a quarterly basis (QtQ) in the second quarter of 2020 contracted or minus 31.4%. This follows the weakening in the first quarter of 2020 where the economy was –5%.
The –31.4% decline figure is the deepest since the government started taking notes in 1947. The Fed forecasts the economy to go along in 2020 is –3.7%. Prospects for 2021 are still uncertain. Because the coronavirus pandemic is far from being controlled and the vaccine is not ready.
Meanwhile, a number of observers considered The Fed’s statement signaling that monetary and fiscal should work better together. Fiscal tightening by a number of states will actually create problems. “That’s why there is a reason to say ‘Come on, we need fiscal support. Stop looking at the federal debt burden. Now is not the time,” said Michael Skordeles, economist at Trust / Suntrust Advisory Service in Atlanta.
“The crisis separates rich and poor, the gulf is widening. So the Fed’s policies are not helping. But the stimulus will help,” said Dennis Dick, another analyst at Bright Trading LLC in Las Vegas.