Fed's Powell again makes case for more fiscal stimulus
By Alexander Bueso
Date: Tuesday 06 Oct 2020
(Sharecast News) - The head of America's central bank laid out the case for additional government spending to prop up the economic recovery in the midst of the Covid-19 pandemic.
In remarks at the National Association for Business Economics's 62nd annual meeting, Jerome Powell described the risks tied to a proposed fourth round of s0-called fiscal stimulus as 'asymmetric'.
That is to say, the risks of doing too little were greater than those of doing too much.
"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," he said.
Business investment in the US had picked up, but the pace of improvement had "moderated", job growth had slowed and layoff announcements from large corporates were "notable".
Hence, in the absence of further help in the form of increased spending, the risk was that "rapid initial gains" in economic growth might "trigger typical recessionary dynamics as weakness feeds on weakness."
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