The uncertainty about the distribution and timing of a coronavirus vaccine is posing challenges for US economic recovery, according to the head of the Federal Reserve. 

The US still leads the world in infections and deaths from COVID-19, and despite news of possible vaccine candidates, the world’s largest economy is still struggling.

“Recent news on the vaccine front is very positive for the medium term,” Jerome Powell said Monday in testimony before the US Senate Committee on Banking, Housing, and Urban Affairs.

“For now, significant challenges and uncertainties remain, including timing, production and distribution, and efficacy across different groups. It remains difficult to assess the timing and scope of the economic implications of these developments with any degree of confidence,” he said.

US biotechnology firm Moderna announced earlier Monday its vaccine efficacy against COVID-19 is 94.1% after phase 3 trials, saying it would immediately file for Emergency Use Authorization in the US and Europe.

It said 20 million doses will be available in the US by the end of 2020 and it plans to manufacture 500 million to 1 billion doses globally in 2021.

American pharmaceutical firm Pfizer and its German partner BioNTech said Tuesday they have also applied to the European Medicines Agency for the authorization of their vaccine.

Powell said the increasing number of new COVID-19 cases in the US and around the world is concerning, and it may become challenging in the next several months for the American economy to overcome the downturn.

“A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities,” he said. “As we have emphasized throughout the pandemic, the outlook for the economy is extraordinarily uncertain and will depend, in large part, on the success of efforts to keep the virus in check,” he added.

Despite the Fed’s monetary aid and quantitative easing policies earlier this year, Congress failed to provide another much-needed fiscal stimulus before the Nov. 3 presidential election.

And recent actions of the government have hurt the Fed’s effort toward economic recovery.

Treasury Secretary Steven Mnuchin asked Powell in a letter Nov. 19 for the Fed to return $455 billion in funding that was not used and is set to expire Dec. 31.

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