Fed Board Member Michelle W. Bowman gave a speech on the economic effects of the coronavirus and evaluated how the American economy was affected by this pandemic. Speaking about the policies the Fed has followed and plans to follow, Bowman; He said that economic uncertainty continues, but that America will “survive” this crisis.
Michelle W. Bowman, one of the executives of the Fed, met with business people from Kansas the other day and explained how the coronavirus affected American citizens, businesses and banks. In America, where the number of cases reached almost 6 million, the economic effects of the coronavirus on citizens were very severe. To measure these effects, the Fed conducted a survey in April 2020 and asked citizens “Have you recently been fired / fired?” asked a question like. According to the information Bowman shared during his speech, 20% of the respondents answered “yes” to this question.
The impact of this pandemic, which resulted in millions of unemployment, on American businesses was also heavy. Coronavirus, which directly affects many businesses across the country; It damaged many different industries, from food to entertainment, from transportation to real estate.
Money Aid Made to Businesses
The Fed purchased securities in large quantities to combat these effects of the Coronavirus. According to Bowman’s statements, the Fed lowered federal funding rates, supported stimulus packages and injected billions of dollars into the economy to support American households and businesses.
The Fed has also had to take radical steps to ease the burden on businesses. One of these steps was the Paycheck Protection Program (PPP). The Fed has provided more than $ 500 billion in financial aid to American businesses, working with local banks across the country as part of the PPP.
In order to help American banks in this process, the US central bank eased some of its responsibilities, especially on small banks, and decided to keep its audits on these banks a little looser.
Economic Uncertainty Still Remains
Bowman said that the Fed took all these steps to relieve the economy. But as the Fed executive said this, he stated that the economy is still not returning to its normal course and that there is still a long way to go. Sharing some notes on economic recovery, Bowman explained that this process remains uncertain.
However, Bowman says this uncertainty will not discourage the Fed. Preserving his optimism about the future of the American economy, Bowman emphasized that they will overcome this crisis together as a country. The closing part of Bowman’s speech titled “Effects of Pandemic on Economy and Banking” is as follows:
“I will keep my optimism forever. Therefore, I will make my closing speech in a hopeful language. Even if the road ahead remains uncertain and we do not know when the economy will regain its former strength, America; It will overcome this crisis, just as it has overcome the difficulties in the past… The Fed will continue to follow this process and support the economic recovery process. “