Fed Chair Jerome Powell said yesterday that the US economy has “entered an important new phase” and has done so “sooner than expected. But while the bounceback in the economic activity is welcome, “it also presents new challenges, notably, the need to keep the virus in check”.

He added, “the path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus”. “The path forward will also depend on the policy actions taken at all levels of government to provide relief and to support the recovery for as long as needed,” Powell said.

Separately, San Francisco Fed President Mary Daly said it’s “far too early” to judge the strength of the economy recovery. “I am really just watching the data, what is happening: it is far too early to tell, or to call it, at this point,” she said. “We have insufficient information to make that kind of judgment, in my opinion.” So far, what she sees is “consistent with a slow and gradual recovery.”

Kansas City Fed President Esther George warned yesterday that “a full recovery is still far off” despite the strong job gains in some industries in May.

“Extraordinary uncertainty about the path of the pandemic over the second half of the year and the economic outlook will require a fair amount of patience and wisdom as we navigate the likely long-lasting implications of the coronavirus shock,” She added.

“Indicators are expected to improve in the third quarter even as the level of activity remains depressed,” but “it might be awhile before the dust settles and we gain insight on whether further accommodation is necessary or not,” she said.