Powell praises progress on COVID-19 relief bill as economy weakens

Powell praises progress on COVID-19 relief bill as economy weakens
© New York Times/Pool

Federal Reserve Chairman Jerome Powell on Wednesday praised progress toward another coronavirus economic relief bill as the U.S faces a daunting and deadly winter.

During a Wednesday press conference, Powell hailed lawmakers for nearing an agreement on a “substantial” relief bill with just weeks before crucial coronavirus aid programs expire. 

“The case for fiscal policy right now is very, very strong, and I think that is widely understood,” Powell said, repeating his longstanding call for a government relief bill that would help struggling households and businesses make it through what may be the most challenging stretch of the coronavirus pandemic.

ADVERTISEMENT

Powell’s comments came soon after Democratic and Republican congressional leaders voiced optimism that ongoing negotiations would finally yield a bipartisan coronavirus relief deal after months of fitful talks. Both sides are nearing an agreement on a roughly $900 billion measure that will include $600 to $700 direct stimulus payments and $300-per-week boost to unemployment benefits.

Powell, like many economists, has urged Congress for months to pass another round of fiscal relief that would provide direct aid to millions of unemployed Americans, the families that depend on them, and small businesses in sectors upended by the pandemic.

At least 9 million Americans are set to lose their unemployment benefits and more than 10 million households could face eviction or foreclosure by the end of the year if Congress does not extend protections that are set to expire on Dec. 31, according to estimates from economists.

Nearly 8 million Americans have fallen into poverty since June due to a combination of rising coronavirus cases and dwindling federal support, according to a study released Wednesday by economists at the University of Chicago and the University of Notre Dame.

And biweekly survey data released Wednesday by the Census Bureau showed that 85.4 million American adults, or 35.6 percent, reported having trouble paying for typical household bills such as food, medicine and rent. 

While the economy on a whole has recovered quicker than initially expected, Powell said Wednesday, millions of Americans and businesses least able to withstand the coronavirus recession are still in dire trouble.

ADVERTISEMENT

“It's the 10 million people who lost their jobs. It's people who may lose their homes. You see the many, many millions of Americans who are waiting in food lines in cars these days all over the country, so we know there's need out there,” he said. 

“We know there are small businesses all over the country that have been basically unable to really function and they're just hanging on.”

The Fed is also facing questions about how much more it can do to support the economy until the pandemic ends and allows the U.S. to recover.

While Powell said the Fed can still increase or adjust monthly purchases of bonds, he doubted that they would provide the immediate support needed to sustain households and businesses amid the pandemic.

“We've talked about this as all of these government policies trying to work together to create a bridge across this economic chasm that was created by the pandemic,” Powell said.

“Now that we can kind of see the light at the end of the tunnel, it would be bad to see people losing their business, their life's work in many cases, or even generations worth of work, because they couldn't last another few months.”