After pandemic ‘this will be a different economy’, says Fed’s Powell

The US economy, boosted by quickening vaccinations, is headed toward a strong recovery, Federal Reserve Chair Jerome Powell said on Thursday.

But he cautioned not all will immediately benefit.

“There are a number of factors that are coming together to support a brighter outlook for the US economy,” Powell said during the virtual spring meetings of the International Monetary Fund and World Bank. Those factors are putting the nation “on track to allow a full reopening of the economy fairly soon.”

Not everyone will immediately benefit from the economic recovery, warns US Federal Reserve chairman Jerome Powell.Credit:The New York Times

Still, Powell said many Americans who are out of work will struggle to find new jobs because some industries will likely be smaller than they were before the pandemic. In other cases, employers are seeking to use technology instead of workers where possible, he said.

“It’s important to remember we’re not going back to the same economy,” Powell said. “This will be a different economy.”

Powell spoke along with other global economic leaders during the meetings of the two global lending agencies. The roundtable discussion also addressed an emerging trend of wealthier nations recovering much faster from the pandemic than poorer countries, in part because of much faster vaccinations.

“It’s important to remember we’re not going back to the same economy. This will be a different economy.”

Fed chair Jerome Powell

Ngozi Oknojo-Iweala, director general of the World Trade Organisation, said that the unequal distribution of vaccines could threaten the global economic recovery. Just 0.1 per cent of vaccines have gone to low-income countries, she said.

“If we don’t do something to change the pace at which the poorer countries are getting access to vaccines, it will take a long time to get to herd immunity for the world,” Oknojo-Iweala said. That, in turn, could threaten those nations already vaccinated, by spreading new variants that could push up case counts and reverse economic progress in wealthier countries.

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