Federal Reserve Chairman Jerome Powell said big questions remain over the outlook for the economy, particularly in light of ongoing efforts to contain the coronavirus pandemic.
In remarks he will deliver Tuesday to the House Financial Services Committee, the central bank leader turned up concerns he had expressed earlier this month about growth as the U.S. remains mired ina recession that began in February.
“Output and employment remain far below their pre-pandemic levels. The path forward for the economy is extraordinarily uncertain and will depend in large part on our success in containing the virus,” Powell said.
“A full recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities,” he added. “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.”
A national mask mandate could potentially slash coronavirus infections in the US and save the country from a 5% hit to its gross domestic product, according to Goldman Sachs.
In a Monday note, chief economist Jan Hatzius and his team investigated the link between wearing a mask and certain economic and health outcomes of COVID-19.
"We find that face masks are associated with significantly better coronavirus outcomes," Hatzius wrote. Face mask use lowered infection growth rates and death rates, the team found. The causal relationship was not weakened when controlling for avoiding large gatherings or avoiding public interactions.
A national mandate would also "likely increase face mask usage meaningfully," Goldman found. Goldman's baseline estimate is that a national mandate could increase the percentage of people who wear masks by 15 percentage points, and cut the daily growth rate of confirmed cases by 1 percentage point to 0.6%.
"These calculations imply that a face mask mandate could potentially substitute for lockdowns that would otherwise subtract nearly 5% from GDP," said Hatzius.