Powell says Fed has America’s back with Congress arguing over aid

Federal Reserve Chairman Jerome Powell sought to maintain neutrality in the debate over whether Congress should build on record stimulus, to further cushion an economy facing increasingly dire pressure from the coronavirus pandemic.

Powell, appearing at a virtual hearing of the Senate Banking Committee on Tuesday, reiterated his stance that more fiscal aid may be needed -- potentially giving Democrats some ammunition for an additional $3 trillion stimulus bill that Republicans and President Donald Trump have already rejected. But he stopped short of a full-throated endorsement, a pleasing stance to Republicans such as Senator Pat Toomey who are urging a go-slower approach.

“I make my comments on fiscal policy on a general level and I’m reluctant to talk about timing and specific provisions,” Powell said under questioning from Brian Schatz, a Hawaii Democrat.

Powell’s reluctance to argue forcefully for more aid suggests a stalemate between Republicans and Democrats over the scale and timing of additional fiscal stimulus will continue. The prospect of any quick rebound in employment is becoming increasingly dim with tens of millions jobless and no strong treatment or vaccine immediately available to support Americans’ confidence in returning to work, school and shopping.

The comments by Powell compare with remarks at the end of last month, when he dismissed concerns about ballooning federal debt, saying that “this is the time to use the great fiscal power of the U.S.”

Powell, who testified along with Treasury Secretary Steven Mnuchin, was pressed on the amount of funding that has been released through the programs already in operation. “It’s all ahead of us. The amount that has gone out so far, in the context of the U.S. economy, is fairly modest,” Powell said.