It is not often that the Chairman of the Federal Reserve Board is interviewed on national television. But these are certainly not normal times. Perhaps the whole world was not watching, but economists and market analysts certainly were. While acknowledging the seriousness of the economic issues we are facing, Powell indicated that more government help would likely be needed to help our recovery. The Fed chairman said there was “no limit” to what the Fed can do to lend money to financial markets — “So there’s a lot more we can do to support the economy, and we’re committed to doing everything we can as long as we need to,” Powell said.
On the other side of the coin, he was optimistic about our ability to overcome these challenges. His words were — I would not bet against the American economy. In summary, the recession will be deep, more help will be needed, but he is expecting we will recover. And while the economy will not spring back to normal, his words tell us the recovery is not expected to be a long and protracted recovery as was the Great Recession of the last decade.
As we have said all along, good medical news such as a vaccine, will make all the difference in the world with regard to a recovery. And we can see how the markets perk up every time progress is announced. This does not mean that an approved vaccine is around the corner or that the economy just springs back when the vaccine comes out–but you can see how much of a boost such news gives us psychologically. And that boost will help our rebound.
Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media? Sign up for a free trial at www.OriginationPro.com.