The Lead: Powell Sees a Coming Boom
Economists have increased their forecasts for economic growth this year to 6.4%. The Wall Street Journal points out that, if true, “that would be one of the few times in 70 years that the economy has grown so fast.”
“What we’re seeing now is really an economy that seems to be in an inflection point,” Fed chair Jerome Powell told “60 Minutes” this weekend. “We feel like we’re at a point where the economy is going to start growing much more quickly.”
Reporter Scott Pelley asked why he sees so many closed businesses and struggling Americans living in tents if the economy is so healthy and booming. Powell says that the people who are hurting the most are those in businesses that “have direct contact” with the public.
Yet the financial industry is braced for a boom as long as the virus does not resurge, according to Powell. He said that when the pandemic started, the Fed’s worst-case forecasts were “unspeakable.” He credits the Fed’s emergency lending powers, low-interest rates, and government stimulus with saving us from that fate.
When asked if all of this growth is rational, Powell said that his economic models could not identify inflated asset bubbles but instead focuses on the strength of the economy and its ability to react. He said that the chance of a repeat global financial crisis like the one we had in 2008 is “very, very low.”