Fed Chairman Jerome Powell says the US may ‘well be in a recession’ due to the coronavirus pandemic

Chairman of the Federal Reserve nominee Jerome Powell testifies during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee November 28, 2017 on Capitol Hill in Washington, DC.

caption
Chairman of the Federal Reserve nominee Jerome Powell testifies during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee November 28, 2017 on Capitol Hill in Washington, DC.
source
Alex Wong/Getty

  • Federal Reserve Chairman Jerome Powell gave a rare exclusive interview with the “TODAY” show Thursday.
  • He discussed the unprecedented impact of the coronavirus pandemic on the US economy.
  • “We may well be in a recession,” Powell said. “But I would point to the difference between this and a normal recession,” he added.
  • Read more on Business Insider.

In a rare live interview Thursday, Federal Reserve Chairman Jerome Powell said that the coronavirus pandemic may have already tipped the US economy into a recession.

“We may well be in a recession,” Powell told Savannah Guthrie on the “TODAY” show Thursday morning. “But I would point to the difference between this and a normal recession,” he added.

The difference between the two lies in the workings of the US economy, according to Powell.

“There is not anything fundamentally wrong with our economy,” he said. “Quite the contrary. We are starting from a very strong position.”

Still, the coronavirus pandemic has presented a unique situation, Powell said.

“I think people need to understand this is not a typical downturn,” he said. “People are being asked to close their business, to stay home from work, and not engage in certain economic activity, and so they are pulling back.”

Read more: Don’t know when to get back into stocks? JPMorgan shares 3 timing tools for re-entry into a coronavirus-ravaged market – including one that’s screaming ‘buy’ right now

That will likely change once the US is on the other side of the pandemic, however. “At a certain point, we will get the virus under control and confidence will return,” Powell said.

To do its part, the Federal Reserve has taken unprecedented action to bolster the US economy and smooth markets amid the outbreak. The Fed slashed interest rates to near zero, has injected trillions into the financial system, and this week launched unlimited bond-buying and a number of facilities to aid local governments and businesses.

The government is doing its part as well. On Wednesday, the Senate passed a massive $2 trillion stimulus package that includes aid for industries hit hardest by the coronavirus pandemic, payments for millions of Americans, and unemployment benefit expansions.