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Federal Reserve Chairman Jerome Powell says Congress must spend more.
Powell explained that the recovery will take longer than expected. And that will require more fiscal stimulus by the government.
“The scope and speed of this downturn are without modern precedent, significantly worse than any recession since World War II,” the Federal Reserve chairman explained.
President Trump and Congress have already set aside $2.9 trillion to support the economy at various levels. This includes households, businesses, health care providers and governments.
That equals approximately 14% of annual GDP.
America’s GDP is falling rapidly. And unemployment is surging to the highest levels since the Great Depression in the 1930s.
Powell explained that the economic decline is hurting the most financially vulnerable. A Fed Reserve survey shows that 40% of households earning less than $40,000 per year had lost a job in March.
The Big News . . .
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Paul Manafort and 2,471 Prisoners Released
The federal government is releasing prisoners to reduce prison populations. Over 2,471 prisoners have been released and will continue to serve their sentences from home. Trump’s former campaign manager – Paul Manafort – is one of those being released.
Deflation Alert: U.S. Prices Drop 1.3%
The producer-price index shows that the prices paid for goods and services fell by 1.3% in April. That was the biggest decline since tracking of this metric began in 2009. Economists predicted a 0.5% drop.
$650 Billion in Tax Breaks
American companies are receiving over $650 billion in tax breaks. These companies include Chipotle, Walt Disney, American Airlines, Valero Energy and Marathon Petroleum.
New $1 Trillion Stimulus
Republicans on Capitol Hill are starting work on another stimulus bill. This one is expected to top $1 trillion and include huge spending on infrastructure projects including 5G. Go here for the top All American 5G stocks to BUY NOW.
The Coronavirus Numbers
Here are the numbers from Wednesday at 11 a.m. ET:
- 4,376,772 Infected worldwide
- 294,490 Deaths
- 1,411,339 Infected in the U.S.
- 83,564 Deaths in the U.S.
What’s Next
Stocks dropped 0.5% on Wednesday morning. The move followed steep declines in Tuesday afternoon trading.
Comments from Federal Reserve Chairman Powell were not encouraging. He warned that Washington must spend more to help turn around the economy.
Additionally, falling producer prices show that companies are earning less for their goods and services. The Fed has targeted an inflation rate of 2%. However, falling prices will make it extremely difficult to hit that target.
Corporate earnings season is wrapping up over the next few weeks.
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Yours in Health & Wealth,
Ian Wyatt