FRANKFURT/WASHINGTON: The heads of the Federal Reserve and the European Central Bank welcomed the encouraging results in trials of a vaccine candidate for the novel coronavirus but stressed that the economic outlook will remain uncertain.
Fed chair Jay Powell and ECB President Christine Lagarde said the economy was still in for a tough time even if the development of a potential vaccine by U.S. drugmaker Pfizer and German partner BioNTech SE was reason for some optimism further ahead.
“From a huge river of uncertainty, we see the other side now,” Lagarde said in a panel discussion with U.S. Federal Reserve Chair Jerome Powell and Bank of England Governor Andrew Bailey.
“But I don’t want to be exuberant about this vaccination because there is still uncertainty” about the production and distribution of the vaccine, she said.
Powell echoed her, saying the vaccine results were “good and welcome news” but it was “too soon to assess with any confidence the implications…for the near term”.
With the euro zone likely heading back into recession this quarter, the ECB has already said it would provide more stimulus in December, most likely through its pandemic emergency bond buying programme and through more favourable loans to the bank sector.
The U.S. economy has recouped just over half the 22 million jobs lost since businesses began reopening after the first shutdowns in March, supported both by extraordinarily easy Fed policy and the first tranche of about $3 trillion in pandemic relief.
But the recovery has been uneven, and the subsequent waves of the virus threaten to make it more so.
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