Frankfurt, Germany—Federal Reserve chief Jerome Powell said Thursday that it is “too soon to assess” the potential impact of a coronavirus vaccine on the economy in 2021, despite recent announcements that have stoked hopes.
“This is certainly good and welcome news for the medium term,” Powell told a virtual conference organized by the European Central Bank.
However, “significant challenges and uncertainty remain about timing, production, distribution and the efficacity for different groups” of a vaccine, he added.
“It’s too soon to assess with any confidence the implications of the news for the path of the economy especially in the near term.”
The appearance was Powell’s first in public since US pharma giant Pfizer and Germany’s BioNTech announced promising results in trials of their potential vaccine showing efficacy of around 90 percent, prompting a rapturous response from financial markets.
Playing down the immediate optimism, Powell warned that “with the virus spreading the next months could be challenging.”
ECB President Christine Lagarde cautioned against “exuberant” hopes for the vaccine’s economic impact, also highlighting the likely logistical challenges.
And Bank of England head Andrew Bailey said he hoped the positive news would reduce uncertainty over the economic outlook, but “we’re not there yet.”
Even with a vaccine on the cards, the euro area’s economic recovery is likely to be “unsteady,” Lagarde had said as she opened the conference Wednesday, with support from central banks needed well into the foreseeable future.