Federal Reserve Chairman Jerome Powell on Tuesday called for continued aggressive fiscal and monetary stimulus for an economic recovery that he says still has « a long way to go »
Noting progress in creating jobs, consuming goods and building businesses among other areas, Powell said now would be the wrong time for policymakers to quit gas
Doing so, he said, could « lead to a weak recovery, creating unnecessary hardship for households and businesses » and thwart a recovery that has so far progressed faster than expected
« On the other hand, the risks of doing too much seem, for the moment, to be less, » Powell added in remarks to the National Association for Business Economics « Even if policy actions ultimately prove to be more important than necessary, they will not be wasted The recovery will be stronger and faster if monetary and fiscal policy continue to work side by side to support the economy until it is clearly out of the woods «
The remarks come amid conflicting signs for an economy trying to shake off the unprecedented effects of the Covid-19 pandemic
At age 11, 4 million jobs lost in associated economic shutdown have been recouped, nearly half of displaced workers remain on the sidelines GDP is set to rebound strongly after falling 31% in Q2 and accommodation was also a strong point
However, Powell warned that pulling back now with fiscal and monetary support could lose momentum and lead to a further slowdown that would not look like the government-induced one that started in February, but rather a more traditional slowdown that would be harder to recover and would worsen the US wealth gap It would be one where « weakness feeds on weakness », he said
« The recovery will be stronger and faster if monetary and fiscal policy continue to work side by side to support the economy until it is clearly out of the woods, » M added. Powell
The businesses hardest hit by the pandemic will need targeted help, he added, nothing that « the right thing to do and the smart thing to do » is to continue to provide a support for workers whose jobs may not return
These remarks are just the latest calls from Fed officials for more budget support
As the Fed cut its benchmark short-term borrowing rate to near zero and instituted a series of lending and liquidity programs, Congress remains stuck to provide further aid When the pandemic struck for the first time, lawmakers quickly passed the CARES law that provided forgivable loans to businesses and direct payments to displaced workers, but that funding has run out
« Although the combined effects of fiscal and monetary policy have so far contributed to the strong recovery in the labor market, there is still a long way to go, » said Mr. Powell
He again underlined the disproportionate impact of the current downturn on those less able to afford it
« A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy It would be tragic, especially in light of our country’s progress on these issues in the years leading up to the pandemic, » he said. -he declares
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Jerome Powell, Federal Reserve System, Chairman of the United States Federal Reserve
Global news – United States – Fed Chairman Powell calls for more help from Congress, saying the risk of doing too much is low
SOURCE: https://www.w24news.com
