Federal Reserve Chairman Jerome Powell on Tuesday called on Congress to continue an aggressive policy to stimulate the economy.
Powell argued that stimulus measures passed by Congress this year, including stimulus payments and the expansion of unemployment benefits, have helped with job creation, consumption of goods, and business formation.
“By contrast, the risks of overdoing it seem, for now, to be smaller,” Powell said in remarks to the National Association for Business Economics on Tuesday. “Even if policy actions ultimately prove to be greater than needed, they will not go to waste.”
He suggested that now, legislators should come to an agreement on a new package. Otherwise, it could “lead to a weak recovery, creating unnecessary hardship for households and businesses,” he said, adding that the U.S. economic recovery has been quicker than anticipated.
Since the start of the CCP (Chinese Communist Party) virus pandemic, tens of millions of jobs have been lost, and the U.S. gross domestic product sharply contracted 31 percent in the second quarter. State governors and officials in municipalities ordered the closure of numerous businesses in a bid to curb the spread of the CCP virus, leading to significant job losses.
“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” Powell argued, adding that some businesses that have been hard-hit during the pandemic will need more help.
His comments come in the midst of an impasse between congressional Democrats led by House Speaker Nancy Pelosi (D-Calif.) and the White House. Pelosi has said that Republicans should accept the latest $2.2 trillion iteration of the HEROES Act, which was passed in the House by Democrats in a party-line vote last month. Republicans have rejected the measure, while Treasury Secretary Steven Mnuchin proposed an approximately $1.6 trillion counter-proposal.
Pelosi and Mnuchin spoke about a stimulus deal on Monday, according to her spokesman. They didn’t come to an agreement.
“The two discussed the justifications for various numbers and plan to exchange paper today in preparation for another phone call tomorrow,” Pelosi’s spokesman Drew Hammill wrote on Twitter on Oct. 5, adding that the two “spoke by phone today at 11:30 a.m. for approximately 1 hour.”
In a comment to fellow Democrats on Monday, Pelosi said the talks are moving “very slowly” with the White House.
The window for a new stimulus bill is quickly closing before the November election, as lawmakers have less than a month to go before Nov. 3.