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Fed Chair Jerome Powell during a virtual press conference last month. Photo: Federal Reserve via Getty Images

Federal Reserve Chairman Jerome Powell said during a virtual interview Friday that the economic blowback from the coronavirus pandemic is hitting those who can least afford it the hardest.

Why it matters: The U.S. economy has plunged into the worst downturn since the Great Depression at a record pace, and a full recovery may take years. More Americans are collecting unemployment now than ever before in history — and 40% of those out of work are in the poorest U.S. households, per a recent Fed survey.

"The pandemic is falling on those least able to bear its burdens. It is a great increaser of inequality. It is low-paid workers who are bearing the brunt of this and women to an extraordinary degree."
— Powell, speaking to Princeton professor Alan Blinder

Powell’s comments came in response to a question about whether the Fed’s latest policies will lead to more income inequality in America. He said "absolutely not."

  • Powell said the Fed’s recent actions were aimed at "creating an environment" where workers will have the best chance to keep their job, get a new job, or go back to their old job if they were furloughed.
  • The Fed's policies have been cited as one reason for the stock market's rebound.

Powell also said that its loan program for medium and large businesses, called the Main Street Lending Program, is "days away" from making its first loans.

  • Powell added that a full economic recovery "will really depend on people being confident that it's safe to go out," while a second wave of the outbreak would "undermine public confidence and might make for a significantly longer recovery, and weaker recovery."

The backdrop: The Fed has taken huge — and sometimes unprecedented — steps in an effort to support key funding markets and the economy.

  • "We crossed a lot of red lines, that had not been crossed before ... this is that situation in which you do that, and you figure it out afterward," Powell said.

Go deeper

Dion Rabouin, author of Markets
Sep 2, 2020 - Economy & Business

Here comes the real recession

Illustration: Sarah Grillo/Axios

Economists are warning that the economic downturn caused by the coronavirus pandemic is now creating another recession: mass job losses, business failures and declines in spending even in industries not directly impacted by the virus.

Why it matters: The looming recession — a possible recession within a recession is less severe than the coronavirus-driven downturn. But it's more likely to permanently push millions out of the labor force, lower wages and leave long-lasting scars on the economy.

Woman who allegedly stole laptop from Pelosi's office to sell to Russia is arrested

Photo: FBI

A woman accused of breaching the Capitol and planning to sell to Russia a laptop or hard drive she allegedly stole from Speaker Nancy Pelosi's office was arrested in Pennsylvania's Middle District Monday, the Department of Justice said.

Driving the news: Riley June Williams, 22, is charged with illegally entering the Capitol as well as violent entry and disorderly conduct. She has not been charged over the laptop allegation and the case remains under investigation, per the DOJ.

Biden will reverse Trump's attempt to lift COVID-related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

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