Fed Chair Jerome Powell Warns U.S. Economy Can't Recover 'Until People Feel Confident That They're Safe'

Federal Reserve Chairman Jerome Powell warned Americans that the economic downturn triggered by the coronavirus outbreak could last until the end of 2021 because recovery won't happen until people feel confident about their safety.

In a CBS 60 Minutes interview Sunday, Powell expressed his belief that domestic economy recovery from the pandemic might not happen until late 2021. "People will go back to work. Unemployment will get back down," he said. "We'll get through this. It may take a while. It may take a period of time. It could stretch through the end of next year. We really don't know."

"This is a time of great suffering and difficulty," Powell continued, "and it's come on us so quickly and with such force, that you really can't put into words the pain people are feeling and the uncertainty they're realizing. And it's going to take a while for us to get back."

Jerome Powell
In this screengrab taken from the Federal Reserve website, Chair of the Federal Reserve Jerome Powell issues the Federal Open Market Committee statement on April 29, 2020 in Washington, DC. Federal Reserve/Getty

He also said a full recovery will be closely tied with consumer confidence in being around others, which may only return to normal after a vaccine: "The parts of the economy that involve people being in the same place very close together, those parts of the economy will be challenged until people feel really safe again."

"We can't fully recover though until people feel confident that they're safe," Powell added.

Since mid-March, over 36 million Americans have filed for unemployment benefits after states' stay-in-place orders and fears of catching the virus left businesses unable to retain staff.

Powell noted that unemployment could peak at 25 percent, with the low-earning and female population being more impacted by the downturn. But Powell added that he believes the country will avoid a depression.

"I don't think [a second Great Depression is] a likely outcome at all," he said. "There are some very fundamental differences. The first is the cause here—we had a very healthy economy two months ago. And this is an outside event, it is a natural disaster, in effect. And that's one big difference."

Democratic lawmakers in the House on Friday passed an additional $3 trillion stimulus relief package to buffer the impacts of the pandemic. The bill may not pass the Republican-led Senate, as Senate Majority Leader Mitch McConnell has indicated that he believes there's "no urgency" to act now. However, the Federal Reserve has injected trillions into the financial system to further combat the economic downturn.

Newsweek reached out to the Federal Reserve for further comment. This story will be updated with any response.