Fed Chairman Jerome Powell pleaded with Congress today in a speech to the National Association for Business Economics. He emphasized the risk of 'doing too much [fiscal spending] is low', when combined withe Fed's monetary agenda, to stimulate the economy during the post-COVID lockdowns.
“By contrast, the risks of overdoing it seem, for now, to be smaller...even if policy actions ultimately prove to be greater than needed, they will not go to waste. The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods.
“The recovery will be stronger and move faster if monetary policy and fiscal policy continue to work side by side to provide support to the economy until it is clearly out of the woods,” Powell added.
“While the combined effects of fiscal and monetary policy have aided the solid recovery of the labor market so far, there is still a long way to go.
“A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy. That would be tragic, especially in light of our country’s progress on these issues in the years leading up to the pandemic."
Financial markets are up in the afternoon as President Trump returns to work at The White House. Economic data showed the trade imbalance widening and jobs continuing to slowly recover.
JOLTS Job Openings (Aug) printed at 6.593M vs 6.685M estimate.
Trade Balance (Aug) printed at -$67.1B vs -$66.1B estimate.
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