The U.S. economy needs another year or maybe more until it gets back to its pre-pandemic levels of activity, Federal Reserve Vice Chairman Richard Clarida said Wednesday.
Clarida noted that policy moves by the Fed and Congress have helped stimulate activity like buying houses and cars and investing in software and equipment, all measure that help boost growth.
“That said, the Covid-19 recession threw the economy into a very deep hole, and it will take some time, perhaps another year, for the level of GDP to fully recover to its previous 2019 peak,” the central bank official told the Institute of International Finance. “It will likely take even longer than that for the unemployment rate to return to a level consistent with our maximum-employment mandate.” Read more…..
Chart of the Day
At a news conference marking the start of their annual spring meetings, the International Monetary Fund and the World Bank said 70 percent of the global economy is caught in a slowdown. The IMF expects world economic growth to decline to 3.3 percent this year. The IMF and World Bank fear that trade tensions, debt distress, and poor policy making could make the situation even worse. IMF Chair Christine Lagarde also warned that developing countries are not benefiting from growth in industrial nations to the same extent they have in the past.