On Tuesday, June 30, New York Fed President John Williams spoke to the Institute of International Finance about the current state of the U.S. economy and how the Fed is responding to the worst recession in living memory.
“We are traveling down a narrow path, balancing a return of economic activity with effective containment of COVID-19.”
“Those who least can afford it have been hardest hit, making a strong and full economic recovery of paramount importance.”
“A strong economic recovery depends on effective and sustained containment of COVID-19.”
In his speech, President Williams highlighted that “the root of this downturn — a global pandemic — means this is a completely different kind of recession compared to anything we’ve experienced in the past.”
Discussing the unemployment rate, he said that around 20 million Americans have lost their jobs. But he noted that “People have been getting back to work and the unemployment rate has started to edge down.” He said, “Although this improvement is welcome, the economy is still far from healthy and a full recovery will likely take years to achieve.” He also highlighted that “The pandemic and the ensuing economic downturn have done disproportionate harm to communities of color.”
President Williams said that “One of the things that’s been unique about this recession is the lightning speed of events.” He pointed to the importance of high-frequency data, which “give us more timely and granular information about what’s going on in the economy in between the standard macro data releases.” He said the data “indicate that we’ve likely seen the low point of the downturn and that the overall economy has begun to recover.” But he also noted that “we are seeing some indications of a slowing in the pace of recovery in states that are currently experiencing large-scale outbreaks.” He said, “This is a valuable reminder that the economy’s fate is inextricably linked to the path of the virus.”
Finally, President Williams said that while the sustained growth and historically low unemployment we attained before the pandemic seem a long way from where we are today, “history teaches us that the economy can get back to full strength, even after deep downturns.”
This article was originally published by the New York Fed on Medium.
The views expressed in this article are those of the contributing authors and do not necessarily reflect the position of the New York Fed or the Federal Reserve System.