Fed Chairman urges quick action to avert tragic economic consequences

Oct 8, 2020
Written by Rose Gundersen, VP of Operations & Retail Services

“Too little support would lead to a weak recovery, creating unnecessary hardship…By contrast, the risks of providing too generous relief are smaller.”

                                                                       Federal Reserve Chairman Jerome Powell

Federal Chairman Jerome Powell who is well regarded by both parties, appears to urge both the White House and Congress to err on the side of being generous to provide millions of Americans a breakthrough before the Nov. 3 election.

At a virtual economics conference on October 6, Powell praised Congress for their extraordinary early stimulus responses. However, a slow recovery “could exacerbate existing racial and wealth disparities in the economy.”

While Republicans and Democrats in Congress continue stay in an impasse on the size of the next stimulus package, Powell urged Congress to act soon because the recovery has slowed sharply in September.

A few hours after Powell’s comment, President Trump tweeted to halt the negotiations until after the November election. Soon thereafter, Trump renewed call to pass additional assistance for airlines, small business aid program and direct stimulus checks.

The Fed’s monetary policy included low interest rate and the buying of unprecedented sums of government securities, but Powell believes the recovery will be stronger and faster when the fiscal policy works side by side with monetary policy to support the momentum. Congress is the body of government to initiate the fiscal policy.

Washington Retail echoes Chairman Powell’s plea urging the White House and Congress to put the interest of Americans first and pass CARES Act IV before the election.

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