Mnuchin warns some economic damage could be permanent unless states reopen

Treasury Secretary Steven Mnuchin told the Senate Banking Committee on Tuesday that the U.S. economy might suffer “permanent damage” from the coronavirus crisis if states wait too long to let businesses reopen. He said if people remain unemployed for extended periods their careers might never recover.

In a joint appearance, Federal Reserve Chair Jerome Powell warned that the economy could face long-term damage unless authorities use further aggressive policies to boost the economy through the crisis.

Powell suggested that the Fed might have to expand its purchases of municipal bonds so that state and local governments don’t slow the recovery by laying off workers. Powell said the economy won’t recover completely until the public health emergency ends.

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