Markets slip as Powell warns of 'significant downside risks' for economy

Markets slip as Powell warns of 'significant downside risks' for economy
© UPI Photo

Stocks opened down Wednesday morning, following remarks by Federal Reserve Chairman Jay Powell outlining "significant downside risk" for the economy because of the coronavirus pandemic.

The Dow Jones Industrial Average was down 250 points, or 1.1 percent, and the S&P 500 was down 28 points, or 1 percent.

“While the economic response has been both timely and appropriately large, it may not be the final chapter, given that the path ahead is both highly uncertain and subject to significant downside risks,” Powell said in a Peterson Institute for International Economics webcast.

ADVERTISEMENT

His remarks come a day after House Democrats unveiled a $3 trillion bill meant to shore up the economy through stimulus checks, expanded unemployment insurance and other measures.

Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellThe Hill's Morning Report - Presented by Facebook - Trump tweets as tensions escalate across US This week: Senate reconvenes as protests roil nation amid pandemic For city parks: Pass the Great American Outdoors Act now MORE (R-Ky), who has called for a "pause" on coronavirus relief measures, called the bill a Democratic wish list.

Congress already has approved four bills amounting to some $3.6 trillion in spending and tax cuts, but unemployment has risen to 14.7 percent and it's unclear how many jobs will come back as businesses reopen.

Analysts say the real unemployment rate could already be as high as 20 percent given that some job losses haven't been reflected in the monthly report so far.