Powell says pace of economic improvement has moderated
WASHINGTON (AP) — Federal Reserve Chairman Jerome Powell says that the pace of improvement in the economy has moderated in recent months with future prospects remaining “extraordinarily uncertain.”
In remarks released by the Fed on Monday, Powell said that the increase in new COVID-19 cases both in the United States and abroad was “concerning and could prove challenging for the next few months. A full economic recovery is unlikely until people are confident that it is safe to reengage in a broad range of activities.”
Powell said while progress on developing vaccines had been “very positive,” significant challenges remained regarding the timing, production and distribution of the vaccines, and it remained difficult to assess the economic implications of this process with any degree of confidence.
Powell’s remarks were prepared for a joint appearance he will make on Tuesday with Treasury Secretary Steven Mnuchin before the Senate Banking Committee. The hearing is part of the panel’s oversight responsibilities required under the $2 trillion CARES Act legilsation Congress passed in March.
In Mnuchin’s prepared remarks, which were also released Monday, the Treasury secretary said the Trump administration was still willing to support targeted fiscal package to provide further economic relief.
“I strongly encourage Congress to use the $455 billion in unused funds from the CARES Act to pass an additional bill with bipartisan support,” Mnuchin said. “The administration is standing ready to support Congress in this effort to help American workers and small businesses that continue to struggle with the impact of COVID-19.”
Mnuchin announced on Nov. 19 that he would not grant extensions for five lending programs being operated jointly by the Fed and the Treasury Department that were scheduled to expire on Dec. 31. Mnuchin said that the money allocated to the Fed for those programs should be used now instead to provide support to Congress for additional assistance to individuals and businesses.