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(FEDERAL RESERVE CHAIRMAN JEROME POWELL):
"The second part will be the bounce back. And you should see during that period the economy opening, stores opening all kinds of different economic entities opening and people going back to work. We're seeing apparently the beginning of that."
The U.S. economy indeed has started down the road of recovery.
That was the message Federal Reserve Chairman Jerome Powell delivered Tuesday to lawmakers in his twice-yearly economic update to Congress.
Powell divided the economy into three stages:
Stage one was the economic shutdown...
And stage two is what's happening now.
"We would expect to see large numbers of people during this period coming back to work during this second period of the call it the bounce back or the beginning of a recovery. And I would say this morning's retail sales number is more evidence that that first of all, that the legislation that you passed, both the PPP and the unemployment insurance and the checks that were sent out, all of that is supporting demand."
Stage three is a full economic recovery, but Powell warned that won't happen until the public is confident the novel coronavirus is contained.
"All of this assumes that the virus remains reasonably well, under control and doesn't experience , you know, an event where the virus rises widely across the nation."
The health crisis and the resulting economic fallout has disproportionately hit lower income and black Americans the hardest.
And with the road to recovery likely to be long and uncertain, Powell was asked by many senators, how can the Fed help address the economic disparities between black and white Americans - Powell responded this way:
"What we learned during the last long expansion is that a tight job market is probably the best single thing that the Fed can do to support gains by all low and moderate income communities, and particularly for minority communities who are heavily represented in this group. So, that's what we can contribute, as well as all the other things we do. We try to model diversity and inclusion. We try to model those values. But we're very focused on maximum employment and getting there as fast as we can."
In an effort to do just that, the Fed chief vowed to keep interest rates near zero, and maintain the other extraordinary measures used to help the economic recovery along - and urged Congress to provide more aid to those hardest hit.
Powell will back for more testimony on Wednesday.