Top central bankers: More help still needed

Despite virus vaccine progress, near term for economy ‘challenging.’

FRANKFURT, GERMANY — Three of the globe’s top central bankers said the economy continues to need help despite progress toward a COVID-19 vaccine, with U.S. Federal Reserve Chair Jerome Powell saying that the U.S. Congress “may have to do more” to cushion the blow from the pandemic.

Speaking at an online conference held by the European Central Bank, Powell, Bank of England Governor Andrew Bailey and European Central Bank head Christine Lagarde emphasized the longer-term threat to the economy from the pandemic while welcoming the preliminary results showing a vaccine by Biontech and Pfizer was highly effective.

Powell said the main risk to the economy “is the further spread of disease here in the United States” and that people may lose confidence that it is safe to go out: “We have said from the beginning that the economy will not fully recover until people are confident it is safe to resume activities involving crowds of people.”

He said news about the vaccine was “certainly good for the medium term” but that it was “too soon to assess the implications for the path of the economy, especially in the near term. And I would say that with the virus spreading, the next few months could be challenging.”

Powell said that, although stimulus efforts from Congress and the Fed in the U.S. had been “quite strong” thus far, “my sense is that we will need to do more, and Congress may need to do more as well in fiscal policy.”