Treasury, Fed Chair: ‘Permanent Damage’ If Lockdowns Persist

The economic downturn from the novel coronavirus pandemic is “without modern precedent” and “significantly worse than any recession” the U.S. has experienced since World War II, U.S. Federal Reserve Chairman Jerome Powell told a Senate panel on Tuesday.

Powell proclaimed in written testimony prepared for a hearing held by the Senate Banking Committee:

Available economic data for the current quarter show a sharp drop in output and an equally sharp rise in unemployment. By these measures and many others, the scope and speed of this downturn are without modern precedent and are significantly worse than any recession since World War II.

His comments came days after he predicted the coronavirus-linked decline in economic activity might last until 2021.

U.S. Treasury Secretary Steven Mnuchin, who testified alongside Powell, warned of potential long-term devastation to the American economy, the longer the shutdown measures imposed by states remain in place.

“There is [a] risk of permanent damage,” he told the Senate panel.

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