Reassurance was only half of Jerome Powell’s February 28, 2020 message. The Federal Reserve chair called the economy’s fundamentals strong, then identified coronavirus as an evolving risk to activity. He promised monitoring and appropriate action. Reading the reassurance without the warning would erase an important limit on what the central bank was saying at that moment. [9]
The latest GDP estimate also required care. BEA reported on February 27 that real output had grown at a 2.1 percent annualized rate in the fourth quarter of 2019. That figure described an earlier national production period. The release counted consumer spending and government spending among positive contributions, alongside negative contributions from inventory investment and nonresidential fixed investment. [26]
For community organizations explaining the news to worried households, our ethical reading is to avoid offering certainty the documents do not contain. An aggregate output gain is not a finding about an individual family’s security; a promise to act is not assistance received. This February 29 retrospective keeps the historical figures and the warning together, without assuming either universal resilience or an already established human toll. [9][26]
Source documents
- Federal Reserve Board - Statement from Federal Reserve Chair Jerome H. Powellhttps://www.federalreserve.gov/newsevents/pressreleases/other20200228a.htm
- Gross Domestic Product, Fourth Quarter and Year 2019 (Second Estimate) | U.S. Bureau of Economic Analysis (BEA)https://www.bea.gov/news/2020/gross-domestic-product-fourth-quarter-and-year-2019-second-estimate