Fed and Treasury Call for New Stimulus

The Chairman of the United States Federal Reserve, Jerome Powell, warned on Tuesday that the negative impacts from the Coronavirus pandemic could lead to greater inequality.

Powell also called for greater government support, the New York Times reported.

“There is a great risk of the pandemic making them worse,” Powell said on Tuesday, speaking before the Senate Banking Committee.

“There’s a real concern that if we don’t act as quickly as possible to support those people, get them back to work, get the economy up and running as much as possible, that we’ll leave behind a more unequal situation.”

Powell also suggested that additional support is needed from both the Federal Reserve and Congress to bridge the gap and stimulate economic recovery.

The Fed Chair further noted that American monetary policymakers intend to maintain the record low interest rates until the economic recovery goals are achieved.

“We can see the end. We just need to get there.”

“People that are in public-facing jobs, in public-facing industries – they may see the light at the end of the tunnel the middle of next year … They may need more help to get there,” Powell was quoted by Reuters as saying.

Meanwhile, the US Secretary of the Treasury, Steven Mnuchin, said that “these businesses cannot wait two or three months,” referring to the need for a new stimulus package to be passed by Congress.

In a hearing before the Senate Banking Committee, Mnuchin urged allocating $300 billion into grants to businesses cope with the COVID-19 crisis.