U.S. markets open in 7 hours 35 minutes

Fed Chair Powell: Health data key to economic recovery

Health issues are central to US economic recovery, according to the Chairman of the Federal Reserve.

In a Sunday (May 17) interview on CBS News' 60 Minutes, Fed Chair Jerome Powell said full recovery is unlikely until confidence is restored, most likely with a vaccine for the new coronavirus.

"The thing that matters more than anything else is the medical metrics, frankly. It's the spread of the virus. The real-time economic data that we're seeing is just a function of how successful the social distancing measures are."

The House of Representatives approved an additional 3 trillion US dollar stimulus package Friday but that's unlikely to get through the Republican-led Senate.

Powell emphasized Congress has already done a lot with an initial 3 trillion in relief: "Will it be enough? And I don't think we know the answer to that. It may well be that the Fed has to do more. It may be that Congress has to do more."

The economy is likely to continue to shrink in the second quarter of this year, with higher unemployment rates.

But Powell thinks the downturn will be shorter than the Great Depression of the 1930s.

Key to the economy, he says, is preventing another surge in infection rates.

"The government would have to reintroduce the social distancing measures. And you would have another downturn. And that would be bad for confidence. So that's a risk we really want to avoid."