- The Federal Reserve expects U.S. household finances and business balance sheets to grapple with “persistent fragilities” as a result of the shock to economic activity arising from the coronavirus pandemic, the central bank said in a report to Congress on Friday.
In its twice-annual Monetary Policy Report to U.S. lawmakers, the Fed also reinforced expectations for a sharp decline in economic activity in the current quarter. Recent data suggests “real gross domestic product will contract at a rapid pace in the second quarter after tumbling at an annual rate of 5% in the first quarter of 2020.”
“It is a long road. It is going to take some time,” Fed Chair Jerome Powell said in a webcast press conference after the meeting. “We can use our tools to support the labor market and the economy and we can use them until we fully recover.” In their economic projections released on Wednesday, the first since December, Fed policymakers saw the economy shrinking at a 6.5% annualized rate in 2020 and the unemployment rate at 9.3% at year’s end, down from 13.3% in May but more than two and half times the 3.5% rate in February, when a record-long economic expansion ended abruptly in the face of the pandemic.
I’m shocked!
Is that what they are calling 'Living by paycheck to paycheck' now?