Federal Reserve Chairman Jerome Powell said Friday’s report found 1.4 million Americans or resumed work in August was good news, but would require more government spending for the economy and a lower interest rate for years .
In an interview with National Public Radio held on Friday afternoon, Mr. Powell said he was concerned for employment in the most difficult sectors of the economy – including travel, leisure and hospitality – due to coronovirus ever returning to normal levels of activity Can not come. Ubiquitous epidemic.
“We think it’s going to be tough from here,” Mr. Powell said. Employment in the service sectors, especially those that support entry-level and low-paid workers, “can be some hard jobs to find because there are parts of the economy that will take longer to recover,” he said. said.
The US economy lost about 22 million jobs between February and April, but nearly half of those people have regained since May. Through August, approximately 11.5 million fewer people had jobs than in February.
According to a transcript released by the NRP, “I think we won’t really know the speed of recovery … with any clarity for a couple.”
Mr. Powell said that the Fed is committed to supporting as long as the economy needs it. The Fed cut short-term rates to near zero in March and is buying government securities at a pace of more than $ 1 trillion per year.
The Fed leader has said for months that he hopes Congress and the White House will need to spend more money and provide other reliefs, such as a moratorium on rental withdrawals, to prevent long-term losses from holding back the economy , Especially because the current shock has hurt the weakest Americans.
“We as a country need to do everything we do … watch out for them,” he said. While this could have significant economic benefits, “Mr. Powell said,” This is also just the right thing to do.
Mr. Powell, who has warned about the risks of elevated levels of federal lending for years, said now is not the time to worry about public debt. Steps to limit the severity of the current recession could quickly improve hiring, spending, and federal revenue.
“It will cost money now, but it will pay dividends later,” he said. On more fiscal relief, he said, “My guess is that, in time, more will be done. And of course I think more will be needed.”
Congress Democrats have been at loggerheads with Republicans and the White House for months over the size of another spending package. Democrats are pushing for significant relief to state and local governments and a package of at least $ 2.2 trillion, the size of a bipartisan measure approved in March.
Republicans have emphasized the size and shape of some individual components and have proposed spending up to $ 1 trillion in additional relief. This week Treasury Secretary Steven Menuchin said Republicans could support legislation that would cost about $ 1.5 trillion.
Mr. Powell declined to say whether stock prices had been raised too much in the form of interest rates in the US and around the world. But he cautioned that there were lower rates for financial markets at their own alarming rates, and added that factors beyond adjacent Fed policy decisions, including low levels of inflation and high levels of savings, Had lowered long-term interest rates globally.
“The relationship between low interest rates and financial instability is generally not as tight as many people think,” he said.
Mr. Powell eliminated the benefits of wearing masks and practicing social distance to allow more and more commercial activities to resume during the epidemic without intensifying the spread of the coronary virus.
“There really was a need to be nationwide and keep a distance from people wearing masks for huge economic benefits,” he said.
Write Nick Timiros at [email protected]
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