Fed's Powell: Outlook is “extraordinarily uncertain”

Reuters has reported that Federal Reserve Chair Jerome Powell on Monday noted the outlook is "extraordinarily uncertain" and will depend both on containing the virus and on government's efforts to support the recovery.

Powell said in remarks prepared for a Congressional hearing on Tuesday that the central bank's Main Street lending facility may prove valuable "in the months ahead" for firms hit by a dramatic drop in economic activity during the pandemic.

Some states have begun to dial back their reopenings as coronavirus infections surge.

Key comments

• Fed's Powell says US. economy has entered important new phase, sooner than expected, according to prepared testimony.
• Says recent economic data offer some positive signs, but output, employment far below pre-pandemic levels.
• Says economic outlook extraordinarily uncertain, depends in large part on containing virus.
• Says outlook also depends on relief provided by government to support recovery as long as needed.
• Says talf has extended $252 mln loans so far.
• Says main street lending may prove valuable 'in the months ahead' for firms hit by pandemic.
• Repeats fed pledge to use full range of tools to support economy.

Market implications

In a hint that not all may be smooth sailing for the US economy as states emerge from months-long shutdowns, risk-off could be the dominating theme on such rhetoric.