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Federal Reserve Chairman Jerome Powell offered an economic update and discussed the Fed's unprecedented fiscal response in a speech given Wednesday at the Peterson Institute. The Fed has continuously stated it will use its tools to their fullest potential until the crisis has passed and the economic recovery is well underway.

"Chairman Powell acknowledged the unprecedented fiscal response, but he clearly believes that it is money well spent if it helps to minimize long-lasting damage to the nation’s economic prospects," said NAFCU Chief Economist and Vice President of Curt Long. "On the topic of negative rates, Chairman Powell firmly denied any interest from the FOMC at this time. The Fed would rather expand on the tools it is currently using, if needed."

During his speech, Powell previewed a Fed survey set to be released today that "reflects findings similar to many others: Among people who were working in February, almost 40% of those in households making less than $40,000 a year had lost a job in March."

"This reversal of economic fortune has caused a level of pain that is hard to capture in words, as lives are upended amid great uncertainty about the future," Powell said.

Powell went on to discuss the measures taken so far by the Fed – and the government – to offset the economic effects of the virus. Some of the Fed's efforts include a NAFCU-sought removal of the Regulation D transaction limit, as well as $2.3 trillion in loans to households, businesses, and state and local governments through the creation and expansion of several facilities. NAFCU has a regularly updated regulator response table, along with numerous other resources for credit unions, available on the association’s coronavirus webpage.

Looking ahead, Powell acknowledged the uncertainty of the economic forecast and noted the answers to these questions will “go a long way toward setting the timing and pace of the economic recovery.”

Watch the full speech. NAFCU will continue to monitor the coronavirus' economic impact and its impact on credit unions' products and services. See all NAFCU's recent economic analysis reports here.