This is despite the development of a potential vaccine by USA drugmaker Pfizer and German partner BioNTech.
"Here at the Fed and in the USA, we are committed to thoughtfully and carefully evaluating the potential costs and benefits of a central bank digital currency", said Powell during his speech at a virtual conference hosted by the European Central Bank.
He further shared that the Fed has been actually actively participating with other central banks on this, adding: "We feel that's been a very productive collaboration".
Mr. Powell spoke Thursday alongside two of his foreign counterparts, European Central Bank President Christine Lagarde and Bank of England Gov. Andrew Bailey.
"In our view, it is simply too early to be certain of the impact the news will have on the economy", Powell said at the ECB's annual central banking forum, which is held online for the first time this year. Ms Lagarde said that while it is now becoming possible to see past the pandemic, "I don't want to be exuberant".
While the recent development of the vaccine is "good and welcome news for the medium term", there are significant uncertainties about "timing production, distribution, and efficacy for different groups", Powell noted.
Bailey said it is "encouraging" and he hopes it will reduce uncertainty, but "we're not there yet". "It's good news obviously, it's encouraging and we need encouraging signs but it is true that it is.not here yet in terms of the implementation of it". And, he said, he worries that when all is said and done, the pandemic will have damaged the economy's long-term productive capacity. He added that the development of a vaccine was in line with BoE expectations for an improved health scenario next year. The BoE expects United Kingdom output to recover and regain pre-pandemic levels only in the first half of 2022.
"We have said from the beginning that the economy will not fully recover until people are confident it is safe to resume activities involving crowds of people", Powell said.
Specifically, Powell said the economy will likely be more technology focused than before and could leave retail, factory and hospitality workers who lost their jobs out of work for longer than they otherwise would be.
Someone tell the stock market: A COVID-19 vaccine will not be a magic bullet for the economy right away, and even with a successful vaccine, recovery will be sloooooooow. The first time jobless claims in the U.S. fell to 709,000 last week, the Department of Labor said Thursday. Economists had expected claims of 735,000 in the week ending November 7, according to a Thomson Reuters survey.
Ms Lagarde said banks had "operated as facilitators as opposed to being the source of the problems" during the 2008 crash, but she warned there was still likely to be a rise in non-performing loans once governments start winding down their support for companies and called on lenders to quickly deal with problems in their loan portfolios.