U.S. Treasury Secretary Steven Mnuchin said Tuesday during a Senate Banking Committee video conference hearing that “there is the risk of permanent damage” to the economy if it remains closed, he said.
Mnuchin called for easing social distancing guidelines as soon as possible to restart the economy, echoing comments from President Donald Trump. To underscore the point, he told the senators he’s willing to go to the Capitol to answer questions in person, saying it’s safe enough to do so.
Trump has pushed for states to quickly reopen their economies. Almost 40% of Americans in households making less than $40,000 a year lost a job in March, according to the Federal Reserve. In the first two months of the pandemic-induced economic shutdown, more than 35 million people lost jobs.
The unemployment rate is seen peaking at 25% by economists at Goldman Sachs Group Inc.
Mnuchin has so far struck a more sanguine view, saying he expects a rebound to begin in the second half of this year. Fed Chairman Jerome Powell, who is testifying alongside Mnuchin, sees a longer road to recovery.
Powell said the scope and speed of the downturn “are without modern precedent and are significantly worse than any recession since World War II” and reiterated that a full recovery may take until the end of 2021.
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