Powell says economic activity far below pre-pandemic levels despite ‘modest rebound’ in some areas

“Federal Reserve Chairman Jerome Powell on Tuesday suggested investors shouldn’t overreact to surprisingly good economic data like the May retail sales report.

In testimony prepared for the Senate Banking Committee, Powell acknowledged some economic indicators have pointed to a stabilization in activity and others have even suggested “a modest rebound.”

“That said, the levels of output and employment remain far below their pre-pandemic levels, and significant uncertainty remains about the timing and strength of the recovery,” Powell said.

The Fed chairman said until the coronavirus disease is contained, a full recovery is unlikely.

In his testimony, Powell said he thought the economy would go through three stages.

The first stage was the shutdown with a sharp drop in activity and that may end at the end of June. The second part will be the “bounceback” with people going back to work. “We’re seeing apparently the beginning of that,” Powell said. The third stage will be the economy “well short” of the pre-pandemic level in February.

“Much of that economic uncertainty comes from the uncertainty about the path of the disease and the effects of measures to contain it,” Powell said.”

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KITCO/Jim Wyckoff
Gold prices down as stock markets resume rallies

24 hour spot gold“Gold prices are moderately lower in early U.S. trading Wednesday, as global equity markets have jumped back into rally modes following last week’s pullbacks. That’s negative for safe-haven gold and silver markets. August gold futures were last down $12.30 an ounce at $1,724.30. July Comex silver prices were last up $0.013 at $17.67 an ounce.

Global stock markets were mostly up in overnight trading. U.S. stock indexes are pointed toward firmer openings when the New York day session begins. Traders and investors are weighing the bullish aspects of generally faster rebounds in world economies than many had expected versus the bearish element of a resurgence in Covid-19 reported cases in some regions of the globe, including some U.S. states. At present, it appears the global economic growth factor is winning out. Skeptics can argue the rally in world stock markets is mainly due to the floods of central-bank infused cash that have hit the global financial system.”

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back to the future“Maybe you’ve seen the parody picture that has gone viral (bad choice of words these days!) on the internet recently of Doc Brown and Marty McFly from Back to the Future.

Wearing his perpetually alarmed expression, the time-traveling Doc warns Marty, “Whatever happens, Marty, don’t ever go to 2020!”

It makes us laugh because it has been a year like no other… and it is not even half over yet!

And now there’s something new to add to 2020’s dark resume right along with everything else that has happened.”

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