On Wednesday, in what could be witnessed as the first US Fed policy response in the pandemic era, the Federal Reserve had hinted years of fiscal support to US economy including at least $120 billion worth of bond buyback per month as the world’s No.
1 economy has been facing off a perilous leg of economic slump prodded by the pandemic outbreak, while the Fed policymaker had forecasted an economic contraction of as much as 6.5 per cent this year with unemployment rate hitting 9.3 per cent by end-2020.
In point of fact, following a two-day meet of the Fed policymakers, the US Fed Chair Jerome Powell had actually admitted in the Post-FOMC minutes statement that the jawdropping number of jobs losses since February which might amount to a rancorous reading of roughly 40 million or more than a tenth of the entire US population, could take years to recover, a potentially grievous blow which has been falling the heaviest on majority communities in the United States, a press agency report had unveiled last week.
Nonetheless, citing the material job losses at roughly 24 million forestalling the initial jobless claims data which would likely to be recovered in a near- to medium-term outlook, Fed Chair Jerome Powell said in a video link followed by the end of the two-day long meet of the policymakers, “Twenty-two, 24 million people - somehow as a country we have to get them back to work.
They did not do anything wrong. This was a natural disaster. It is a long road. It is going to take some time. We can use our tools to support the labour market and the economy and we can use them until we fully recover. ”
Years-long fight en route to recovery
Aside from that, as the fresh projections of the US Central Bank begins to show how long it might take to reach a pre-pandemic phase, the Fed policymakers were quoted saying that, at the median, the unemployment rate would fall to 9.5 per cent by end-2020 from a current figure of 13.7 per cent and to 5.5 per cent by end-2021, suggesting millions of lost years for works and wages.