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| Fed Is Wary That Economic Pain Could Last, April Minutes Show | Fed Is Wary That Economic Pain Could Last, April Minutes Show |
| (about 13 hours later) | |
| Federal Reserve officials are painting a relatively bleak picture of the United States economy’s path forward amid the coronavirus pandemic, suggesting that activity may take time to bounce back even as lockdowns lift and warning that second-wave outbreaks could inflict serious damage on businesses and the labor market. | Federal Reserve officials are painting a relatively bleak picture of the United States economy’s path forward amid the coronavirus pandemic, suggesting that activity may take time to bounce back even as lockdowns lift and warning that second-wave outbreaks could inflict serious damage on businesses and the labor market. |
| While the Trump administration has been suggesting a more positive outlook for the United States economy, the nation’s foremost economic authority — its central bank — has taken a much more cautious view, warning that the bounce back may be halting and that a full recovery cannot take hold until the health threat posed by the deadly virus is under control. | While the Trump administration has been suggesting a more positive outlook for the United States economy, the nation’s foremost economic authority — its central bank — has taken a much more cautious view, warning that the bounce back may be halting and that a full recovery cannot take hold until the health threat posed by the deadly virus is under control. |
| Central bank officials met remotely April 28 and 29, and notes from the gathering released Wednesday showed that they discussed ways in which the sharp economic decline already underway could create longer-lasting fallout. Among their worries: Lockdowns meant to contain the pandemic are weighing on emerging market economies, leaving United States companies more indebted, spurring consumer caution and heightening financial vulnerabilities. | Central bank officials met remotely April 28 and 29, and notes from the gathering released Wednesday showed that they discussed ways in which the sharp economic decline already underway could create longer-lasting fallout. Among their worries: Lockdowns meant to contain the pandemic are weighing on emerging market economies, leaving United States companies more indebted, spurring consumer caution and heightening financial vulnerabilities. |
| “Participants expressed concern that the possibility of secondary outbreaks of the virus may cause businesses for some time to be reluctant to engage in new projects, rehire workers or make new capital expenditures,” according to the minutes. | “Participants expressed concern that the possibility of secondary outbreaks of the virus may cause businesses for some time to be reluctant to engage in new projects, rehire workers or make new capital expenditures,” according to the minutes. |
| In discussing the outlook for the economy, Fed officials said that “the economic effects of the pandemic created an extraordinary amount of uncertainty and considerable risks.” Lifting lockdown orders could allow economic activity to recover, especially if infections faded enough to make consumers comfortable, but that was seen by policymakers as an optimistic scenario. | In discussing the outlook for the economy, Fed officials said that “the economic effects of the pandemic created an extraordinary amount of uncertainty and considerable risks.” Lifting lockdown orders could allow economic activity to recover, especially if infections faded enough to make consumers comfortable, but that was seen by policymakers as an optimistic scenario. |
| “A number” of Fed officials saw a “substantial likelihood of additional waves of outbreak” that would cause further social distancing and widespread business closures, leading to a “protracted period of severely reduced economic activity.” | “A number” of Fed officials saw a “substantial likelihood of additional waves of outbreak” that would cause further social distancing and widespread business closures, leading to a “protracted period of severely reduced economic activity.” |
| The central bank’s influential staff was even more blunt, stating that “a more pessimistic projection” involving a second outbreak “was no less plausible than the baseline forecast.” | The central bank’s influential staff was even more blunt, stating that “a more pessimistic projection” involving a second outbreak “was no less plausible than the baseline forecast.” |
| Jerome H. Powell, the Fed chair, struck a similarly cautious tone at a virtual news conference after the April meeting, warning that the recovery could take time and pledging that monetary policymakers would do what they could to cushion the blow and get the labor market back on track. | Jerome H. Powell, the Fed chair, struck a similarly cautious tone at a virtual news conference after the April meeting, warning that the recovery could take time and pledging that monetary policymakers would do what they could to cushion the blow and get the labor market back on track. |
| The minutes make clear that his dim assessment closely reflected his colleagues’ views. | The minutes make clear that his dim assessment closely reflected his colleagues’ views. |
| Fed meeting participants worried that the labor market might suffer longer-run damage if the crisis lingered and workers lost skills amid heightened unemployment, a concern that Mr. Powell repeated during a Senate Banking Committee hearing on Tuesday. He warned that the economy was not likely to quickly rebound even once states ended lockdowns and that households and businesses might need more support to get through the downturn. | Fed meeting participants worried that the labor market might suffer longer-run damage if the crisis lingered and workers lost skills amid heightened unemployment, a concern that Mr. Powell repeated during a Senate Banking Committee hearing on Tuesday. He warned that the economy was not likely to quickly rebound even once states ended lockdowns and that households and businesses might need more support to get through the downturn. |
| “We have 20-some million people out of work; we want to do everything we can to create a world where they can go back to their jobs or find new jobs,” Mr. Powell said at the hearing. “That’s something all of us as policymakers should be strongly focused on.” | “We have 20-some million people out of work; we want to do everything we can to create a world where they can go back to their jobs or find new jobs,” Mr. Powell said at the hearing. “That’s something all of us as policymakers should be strongly focused on.” |
| The unemployment rate, which was hovering near a 50-year low of 3.5 percent before states began to enforce lockdowns meant to contain the coronavirus back, jumped to 14.7 percent in April as tens of millions lost their jobs. While many of those job cuts are temporary furloughs, they could become permanent if businesses fail. | The unemployment rate, which was hovering near a 50-year low of 3.5 percent before states began to enforce lockdowns meant to contain the coronavirus back, jumped to 14.7 percent in April as tens of millions lost their jobs. While many of those job cuts are temporary furloughs, they could become permanent if businesses fail. |
| The Congressional Budget Office expects that the jobless rate will still be above 8 percent at the end of 2021, based on economic forecasts released yesterday. | The Congressional Budget Office expects that the jobless rate will still be above 8 percent at the end of 2021, based on economic forecasts released yesterday. |
| The Fed has moved quickly to cushion the economy, cutting interest rates to near zero over the course of two emergency meetings in March, buying unlimited quantities of government-backed bonds to soothe troubled markets and unrolling nine emergency lending programs meant to keep credit flowing to businesses and local governments. | The Fed has moved quickly to cushion the economy, cutting interest rates to near zero over the course of two emergency meetings in March, buying unlimited quantities of government-backed bonds to soothe troubled markets and unrolling nine emergency lending programs meant to keep credit flowing to businesses and local governments. |
| Policymakers are hopeful that those efforts, together with major spending programs passed by Congress and signed by President Trump, could limit the economic damage, but they have repeatedly said more policy help may be needed. | Policymakers are hopeful that those efforts, together with major spending programs passed by Congress and signed by President Trump, could limit the economic damage, but they have repeatedly said more policy help may be needed. |
| Updated June 16, 2020 | |
| The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave. | |
| So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. | So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement. |
| Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. | Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks. |
| A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. | A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study. |
| The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. | The unemployment rate fell to 13.3 percent in May, the Labor Department said on June 5, an unexpected improvement in the nation’s job market as hiring rebounded faster than economists expected. Economists had forecast the unemployment rate to increase to as much as 20 percent, after it hit 14.7 percent in April, which was the highest since the government began keeping official statistics after World War II. But the unemployment rate dipped instead, with employers adding 2.5 million jobs, after more than 20 million jobs were lost in April. |
| Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. | Mass protests against police brutality that have brought thousands of people onto the streets in cities across America are raising the specter of new coronavirus outbreaks, prompting political leaders, physicians and public health experts to warn that the crowds could cause a surge in cases. While many political leaders affirmed the right of protesters to express themselves, they urged the demonstrators to wear face masks and maintain social distancing, both to protect themselves and to prevent further community spread of the virus. Some infectious disease experts were reassured by the fact that the protests were held outdoors, saying the open air settings could mitigate the risk of transmission. |
| States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. | States are reopening bit by bit. This means that more public spaces are available for use and more and more businesses are being allowed to open again. The federal government is largely leaving the decision up to states, and some state leaders are leaving the decision up to local authorities. Even if you aren’t being told to stay at home, it’s still a good idea to limit trips outside and your interaction with other people. |
| Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. | Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days. |
| If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) | If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.) |
| Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. | Taking one’s temperature to look for signs of fever is not as easy as it sounds, as “normal” temperature numbers can vary, but generally, keep an eye out for a temperature of 100.5 degrees Fahrenheit or higher. If you don’t have a thermometer (they can be pricey these days), there are other ways to figure out if you have a fever, or are at risk of Covid-19 complications. |
| The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. | The C.D.C. has recommended that all Americans wear cloth masks if they go out in public. This is a shift in federal guidance reflecting new concerns that the coronavirus is being spread by infected people who have no symptoms. Until now, the C.D.C., like the W.H.O., has advised that ordinary people don’t need to wear masks unless they are sick and coughing. Part of the reason was to preserve medical-grade masks for health care workers who desperately need them at a time when they are in continuously short supply. Masks don’t replace hand washing and social distancing. |
| If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. | If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others. |
| If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. | If you’re sick and you think you’ve been exposed to the new coronavirus, the C.D.C. recommends that you call your healthcare provider and explain your symptoms and fears. They will decide if you need to be tested. Keep in mind that there’s a chance — because of a lack of testing kits or because you’re asymptomatic, for instance — you won’t be able to get tested. |
| The April minutes show that officials “acknowledged that even greater fiscal support may be necessary if the economic downturn persists.” | The April minutes show that officials “acknowledged that even greater fiscal support may be necessary if the economic downturn persists.” |
| Republican lawmakers have begun trying to shift the economic discussion away from more financial support to helping the economy by reopening states and cutting taxes, suggesting that more aid may not be forthcoming. The Trump administration has said it would veto a $3 trillion bill that Democrats passed in the House last week. | Republican lawmakers have begun trying to shift the economic discussion away from more financial support to helping the economy by reopening states and cutting taxes, suggesting that more aid may not be forthcoming. The Trump administration has said it would veto a $3 trillion bill that Democrats passed in the House last week. |
| The Fed’s next steps could involve explicitly promising to keep rates low — tying them to either economic thresholds or a specific time span — or refining their bond-buying program, based on the minutes. Many analysts have suggested that the Fed could transition its current asset purchase program, meant to keep markets functioning smoothly, into one meant to boost the economy. | The Fed’s next steps could involve explicitly promising to keep rates low — tying them to either economic thresholds or a specific time span — or refining their bond-buying program, based on the minutes. Many analysts have suggested that the Fed could transition its current asset purchase program, meant to keep markets functioning smoothly, into one meant to boost the economy. |
| “Members agreed that the Federal Reserve was committed to using its full range of tools to support the U.S. economy in this challenging time,” the minutes said. | “Members agreed that the Federal Reserve was committed to using its full range of tools to support the U.S. economy in this challenging time,” the minutes said. |
| Fed officials are also alert to financial stability risks if the pandemic drags on. They said at the April meeting that banks “could come under greater stress, particularly if adverse scenarios for the spread of the pandemic and economic activity were realized,” and “a number” of officials suggested banks should be encouraged to stop making shareholder payouts. | Fed officials are also alert to financial stability risks if the pandemic drags on. They said at the April meeting that banks “could come under greater stress, particularly if adverse scenarios for the spread of the pandemic and economic activity were realized,” and “a number” of officials suggested banks should be encouraged to stop making shareholder payouts. |
| Central bankers have so far been reluctant to make large banks, which have temporarily suspended share buybacks, stop dividend payouts. | Central bankers have so far been reluctant to make large banks, which have temporarily suspended share buybacks, stop dividend payouts. |
| The Fed’s next scheduled meeting is June 9 and 10. | The Fed’s next scheduled meeting is June 9 and 10. |