Powell: "Serious Uncertainty in Economic Recovery... Crisis for Self-Employed"

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Baek Jong-min] Jerome Powell, Chairman of the U.S. Federal Reserve (Fed), once again expressed concerns about the recovery of the U.S. economy.

On the 16th (local time), Powell appeared before the Senate Banking Committee and testified, "There is serious uncertainty about the timing and strength of the economic recovery." He also diagnosed that small and medium-sized enterprises (SMEs), self-employed individuals, and low-wage groups are in crisis.

Powell has been warning daily about the recent uncertainty in the direction of the U.S. economy. At the press conference following last week's Federal Open Market Committee (FOMC) meeting, which decided to keep interest rates unchanged, he described the economic recovery as a "long road," raising concerns in the market.

Despite May retail sales showing a record increase of 17.7% compared to the previous month, Powell's level of warning has not diminished.

He evaluated that various production and employment levels remain significantly lower than before the COVID-19 pandemic. He further stated, "Most of the economic uncertainty depends on the uncertainty of the disease and how we manage it."

He also emphasized the crisis faced by SMEs due to COVID-19. He stressed, "If small business owners and SMEs fall into crisis due to delayed economic recovery, we will suffer losses beyond just losing their businesses. These businesses are the heart of our economy."

Powell again expressed concern about the damage COVID-19 has caused to Black, Hispanic, and women populations. He warned that if they are neglected in the job market and their incomes decrease, polarization will spread.

Meanwhile, following Powell's remarks, the upward trend of the New York stock market slowed. The Dow Jones Industrial Average, which started the day up 3%, was rising 1.26% compared to the previous day as of 10:55 a.m.