A day after President Donald Trump set an April 30 deadline for reopening the U.S. economy, Federal Reserve Chairman Jerome Powell urged caution.
Speaking on a Brookings Institution webinar on Thursday, the head of the world’s most powerful central bank said the timing should be left to public health and medical experts.
Trump’s latest deadline, which the president said would create a “big bang” of economic activity in May, comes after he relinquished an earlier date he set of Easter, which is this Sunday.
Reopening the economy needs to be done in a way that gives consumers and workers “confidence,” said Powell. In other words, if people think going to stores, restaurants, or offices might make them sick – and potentially infect family members amid the worst pandemic in a century – they aren’t likely to adhere to any deadline set by the federal government.
“While we all want it to happen as soon as possible, we all want to avoid a false start where we partially reopen and that results in a spike in coronavirus cases and then we have to go back again to square one,” Powell said. “I would rely on the medical experts” to decide on timing, he said.
With a COVID-19 vaccine still many months away, the resumption of economic activity shouldn’t come until the pandemic is under control, Powell said.
The traditional method used by public health officials to control epidemics – used with success in South Korea to control COVID-19 – is to widely test, identify sick people, trace their contacts and test those people.
“It really depends on the path of the coronavirus – how quickly will it spread, how quickly do we get it under control, how quickly are we able to reopen the economy with confidence,” Powell said. “That means people can go back to work knowing it’s safe and businesses can reopen knowing it’s safe.”
Powell said he expects an economic rebound to begin in the third quarter, meaning the beginning of July.
