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Fed Chief Addresses the R-Word

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Are we going to enter a recession? We may already be in one, said Federal Reserve Chair Jerome Powell on Thursday, though he tempered his answer. In a Today Show appearance, Powell acknowledged that "we may well be in a recession," but "I would point to the difference between this and a normal recession. There's nothing fundamentally wrong with our economy." Rather, "people are being asked to step back from economic activity … so in principle if we get the virus spread under control fairly quickly then economic activity can resume." He said the coronavirus will "dictate the timetable," but that he can envision an economic recovery starting in Q3, reports Politico.

Savannah Guthrie asked whether the economy can handle a months-long shutdown, and Powell responded with this: "You may well see significant rises in unemployment, significant declines in economic activity, but there can also be a good rebound on the other side of that. and that's actually one of the main things we're trying to do by assuring the flow of credit in the economy and keeping rates low, is to assure that that rebound when it does come is as vigorous as possible." His comments came as jobless numbers were released—a count four times the previous record, set in 1982.

(Here's what kind of unemployment rate that could translate into.)

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