The US Congress would be wise to swiftly approve additional relief efforts to get the world’s largest economy through the corona crisis. Jerome Powell, chairman of the umbrella organization of the Federal Reserve Central Bank, spoke out in favor. According to Powell, there are many industries that could use help.
Powell attended the House of Representatives finance meeting. Powell said the effects of the crisis will become even more apparent in the months ahead. For this reason, additional support for the unemployed, small businesses and local authorities is urgently needed.
“I would start with the job market,” Powell said. “I think we should remember that despite the welcome strides that have been made to get people back to work, 10 million people are still unemployed due to the pandemic.”
Powell also answered questions about the alleged rift between the central bank and the Treasury Department over the phasing out of loan programs put in place during the pandemic. Minister Steven Mnuchin wants to use the billions reserved for this in other ways, while Powell wants to keep the measures, although this support money has not yet been used very emphatically.
Powell feared that the US population would interpret this as a step backwards. According to him, the Fed wanted to send a signal. The umbrella association of banks has been calling for more government incentives for months. The Fed itself set its main interest rate close to zero this spring.
The discussions about additional support have been going on for months. This is because Republicans and Democrats cannot agree on the scope of emergency aid. Small business owners in particular will have a hard time this winter, Powell said.
He said nothing about the steps to be taken at the next meeting in mid-December. Powell reiterated that the Fed will use whatever tools it needs to support the economy.