Federal Reserve Chairman Jerome Powell said on Thursday that the development of an effective COVID-19 vaccine was good news for the future, but the immediate outlook remained strained.
In an interview with other central bankers sponsored by the European Central Bank, Powell said “the next few months could be difficult” as the coronavirus is spreading at a faster rate.
The development of the vaccine “is a good and welcome medium term,” said Powell.
But he quickly warned that “significant challenges and uncertainties remain over the timing of production, distribution and efficiency for different groups.”
“It is simply too early to confidently assess the implications of this news for the trajectory of the economy, especially in the near term,” said the Fed chairman.
Overall, Powell said the US economic recovery “is slowing down a bit” but remains on a solid course. The slowdown is “understandable” given the speed and strength of its recovery in May and June, he said.
“We see the economy on a solid path to recovery. The main risk is the continued spread of the disease, ”said Powell.
A number of states are reimposing limited activity restrictions to control the pandemic, he noted. People can lose the confidence that it is safe to go out, he said.
Since the way forward for the economy can be difficult, the Fed “may need to do more” to strengthen the recovery, Powell said.
Congress may also “need to do more,” he said, quickly adding that “the real details” are up to lawmakers.
Stocks were weaker at noon with the Dow Jones Industrial Average DJIA,
down 111 points.