How is the US economy rated?

Fed: US economy could shrink 30 percent

The top monetary watchdog of the United States, Jerome Powell, expects the US economy to slump by 20 to 30 percent in the second quarter of 2020. Assuming that there will be no second wave of pandemics, he expects a steady recovery in the American economy in the second half of this year, the head of the US Federal Reserve (Fed) told the broadcaster CBS in an interview. However, it could take until the end of 2021 for full recovery, said Jerome Powell. He did not rule out that a prerequisite for this could be a vaccine against the virus. "For the economy to recover fully, people must have full confidence."

US economic output had already declined by 4.8 percent in the first quarter - at that time, however, the virus had more of an impact on the markets than on domestic production. In the meantime, this has also been badly affected, with the unemployment rate skyrocketing from 3.5 percent in February to 14.7 percent in April.

Powell under pressure

The heads of the US Federal Reserve rarely address a larger audience in public. Powell's appearance on the CBS program "60 Minutes" is his second television interview since the Fed began fighting the coronavirus outbreak.

Powell had last warned of a long dry spell in the US economy and thus startled the stock markets. The Federal Reserve has lowered its key rate for supplying banks with money to the range of zero to 0.25 percent and has launched extensive support programs for the economy in the trillions of dollars. She is under pressure from the US government to take further measures: President Trump is calling for negative interest rates.

Trump: "We are back"

Regarding the development of a vaccine, the President recently said that he hoped that such a drug would be available in the fight against Corona by the end of the year at the latest. On Friday, however, Trump also made it clear that, in his view, a vaccine is not a prerequisite for a recovery in the US economy. "Vaccine or no vaccine: We are back," he said, referring to the easing of the corona restrictions and the reopening of the economy that he was aiming for.

Obama: Those in charge don't know what they're doing

Former President Barack Obama has sharply criticized the US government's corona policy: "Above all, this pandemic has undermined our conviction that the people who are responsible know what they are doing."

In Obama's view, however, the crisis not only reveals the ignorance of those in power. "Many of them don't even pretend they have responsibility," he added in a video speech for a graduation ceremony. The democratic ex-president did not mention any names. However, it is certain that the criticism was directed at his Republican successor in office, Trump.

Obama has rarely appeared publicly since his term ended in January 2017. According to his own statements, he feels obliged to the tradition that a previous president does not publicly evaluate the work of his successor.

More than 88,000 corona deaths in the USA

The United States is by far the hardest hit country in the world by the pandemic. According to new figures from Johns Hopkins University, more than 1.46 million people in the USA have become infected with the SARS-CoV-2 virus, and more than 100,000 were added in the past week alone. More than 88,000 people died in connection with corona infection.

ehl / qu / rb (rtr, dpa, afp)