Federal Reserve Chairman Jerome Powell has consistently urged Congress and the White House to "think big" on its coronavirus response. House Speaker Nancy Pelosi took another stab at it with the HEROES Act which the House passed last Friday. On 60 Minutes Sunday, Powell continued the argument.
Congress and the White House have to have "policies that help businesses avoid avoidable insolvencies and that do the same for individuals—keep workers in their homes, keep them paying their bills. Keep families solvent so that when this comes, we come out the other end of this, we're in a position to have a strong recovery," he said. Which it doesn't take any real brilliance to figure out. It's pretty darned obvious to anyone, but nonetheless not a compelling argument for Republicans, who aren't interested in helping the workers and their families.
Powell didn't throw himself into that political fight, but his position is pretty clear. "The thing is that the coronavirus shock is also the biggest shock that the economy's had in living memory," he continued. "And the question is, will it be enough? And I don't think we know the answer to that. It may well be that the Fed has to do more. It may be that Congress has to do more. And the reason we've got to do more is to avoid longer-run damage to the economy." The "it may be" turned into we "have to do more" and we have to do it "to avoid longer-run damage to the economy."
Hunger is still happening. Unemployment is still increasing. COVID-19 cases and deaths are still increasing. The "let's wait and see what happens" attitude with the last tranche of money under the CARES Act isn't cutting it as the pain and uncertainty and disaster grow. Powell isn't going to say that, but his opinion is pretty clear. "It is true that deficits are going to be big for a couple of years here," Powell said. "And that we'll have to deal with that. The time to deal with that though is when we're through this recovery." Not spending all the money now, Powell said risks "longer-run damage to the productive capacity of the economy and to people's lives."
He also said that the central bank is "not out of ammunition by a long shot" and that there is "no limit" to what the Fed can do to boost financial markets. "So there's a lot more we can do to support the economy, and we're committed to doing everything we can as long as we need to," Powell said. Now he just has to convince the Republican Senate and Donald Trump to join him.