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Powell to caution that US must keep ‘virus in check’

Jay Powell, the Federal Reserve chair, says the US will need to “keep the virus in check” as the world’s largest economy begins to rebound from the shock of the coronavirus pandemic.

In prepared testimony released ahead of a hearing before the House financial services committee on Tuesday, Mr Powell offered a more upbeat assessment of the current state of the economy than he has in the past.

But in the face of worrying spikes in cases across states ranging from Arizona to Florida and California, he cautioned that containing the outbreak needed to remain a priority.

“As the economy reopens, incoming data are beginning to reflect a resumption of economic activity: many businesses are opening their doors, hiring is picking up, and spending is increasing. Employment moved higher, and consumer spending rebounded strongly in May. We have entered an important new phase and have done so sooner than expected,” Mr Powell said.

“While this bounceback in economic activity is welcome, it also presents new challenges — notably, the need to keep the virus in check,” he added.

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