Federal Reserve Chairman Jerome Powell said the economy may be in recession as a result of the coronavirus pandemic, but has potential to rebound depending on how quickly the virus is contained.
During an interview with NBC’s Today show, Powell said the economy was in a strong position before the COVID-19 outbreak spread in the United States, citing 50-year lows in unemployment.
“We may well be in a recession,” said Powell during the interview, but added this recession is different from normal, and there is nothing “fundamentally wrong” with the economy.
“This is a situation where people are being asked to step back from economic activity, close their businesses, stay home from work,” said Powell. “In principle, if we get the virus spread under control fairly quickly, then economic activity can resume, and we want to make that rebound as vigorous as possible.”
The Fed has taken several steps to bolster the economy as it weathers a coronavirus pandemic that has shut down many businesses. On Monday, the Fed revealed several programs aimed at making credit more widely available to consumers and businesses. Earlier this month, the agency cut short-term interest rates to zero.
“This is a unique situation,” said Powell. “This is not a typical downturn.”
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