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(MNI) Ottawa
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The IMF on Monday urged Congress to dole out more aid to carry the economy through the pandemic, days after talks to extend the USD600 a week federal top-up of jobless benefits that expired last month broke down.

IMF executives wrote in their annual Article IV assessment that "an additional sizable fiscal package would be needed to strengthen health preparedness and sufficiently boost demand, including through increased federal transfers to state and local governments."

The report Monday said executives largely agree with the earlier Article IV report by IMF staff published last month, which said the biggest risk is from another round of Covid-19 shutdowns that requires continued fiscal and monetary policy support. President Donald Trump over the weekend offered executive orders on relief programs that may not stand because it infringes on the powers of Congress over spending.

The Fed has done a good job so far and can do more, the report said. "With inflation and employment likely to remain below targets for an extended period, Directors saw scope for more action, including through expanded asset purchases and more explicit forward guidance, while closely monitoring potential risks to financial stability," the report said.

"The U.S. financial system has been resilient in the face of the recent economic and financial shock. They called for continued vigilance given risks from the recession, rising corporate leverage, a continued migration of activity to nonbank financial institutions, and complex interlinkages among institutions and markets. Directors emphasized the need to preserve bank capital buffers and stringency of prudential requirements."

MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com
MNI Ottawa Bureau | +1 613-314-9647 | greg.quinn@marketnews.com

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