Powell, Brainard Warn Crisis Hitting Most Fragile Americans
(Bloomberg) -- An unprecedented economic downturn is falling on the most vulnerable Americans, Federal Reserve Chairman Jerome Powell said Thursday.
“While the burden is widespread, it is not evenly spread,” Powell said in a chat with community leaders, labor organizers, small business owners and bankers from around the nation. “Those taking the brunt of the fallout are those least able to bear it.”
The so-called Fed Listens session is one of many the Fed has staged in person around the country over the past year in cities such as Richmond and Cincinnati. The central bank has aimed to discuss its price stability and maximum employment goals with small businesses, labor leaders and non-profit organizations, and to get feedback from them on its policy strategy.
Thursday’s event, which was moderated by Fed Governor Lael Brainard, took place against a backdrop that’s starkly different from previous Fed Listens meetings just months ago. Since then, the coronavirus shutdown has tossed millions out of work. The U.S. unemployment rate soared to 14.7% in April from 50-year lows earlier in the year.
Powell asked several questions of participants in the session. He probed about whether government aid was reaching its intended targets, if a community college was making a successful transition to online learning and he asked Joanne Chang, co-founder of the Boston restaurant chain Myers + Chang, how long it would be until she resumed sit-down service.
‘Lighting a Candle’
“As a group, you guys are all about hope,” Powell said to the community leaders and business people through the webcast. “You’re about lighting a candle, although I’d also say we’re cursing in darkness a little bit, and appropriately so.”
“We’ve got to help each other through this and that’s what we’re going to do,” he said.
Fed officials have been noting since early on in the economic and public health crisis that the losses are skewed toward vulnerable populations, reversing hard-fought gains that took a decade to achieve.
The unemployment rate for high school graduates with no college education, for example, stood at 17.3% last month. For African-Americans it was 16.7%.
“The fallout from the Covid pandemic has cruelly hit groups with thinner financial cushions the hardest -- workers in the lowest quarter of earnings, people of color, low and moderate income communities, and women disproportionately employed in services jobs,” Brainard said in her opening remarks for the event.
Powell ended on a note of cautious optimism.
“Fairly soon we’re going to be on the road to recovery and making progress and moving back to where we were,” he said. “We’re going to get there.”
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