Free Trial

Powell Warns Economy At Risk Of Prolonged Slowdown, Urges Congress To Act

FED
(MNI) WASHINGTON
  • The risks of adding too much policy support is smaller than not doing enough, Fed Chair Jerome Powell said in remarks to NABE, again urging Congress to pass another fiscal package for an economy that rebounded better than originally expected but is not out of the woods yet. "Too little support would lead to a weak recovery, creating unnecessary hardship for households and businesses."
  • Fiscal and monetary policy actions together have "so far supported a strong but incomplete recovery" that have for now substantially muted the normal recessionary dynamics that occur in a downturn, he said.
  • Powell flags two downside risks: the possibility that Covid-19 cases might again rise and "a prolonged slowing in the pace of improvement over time could trigger typical recessionary dynamics, as weakness feeds on weakness," he says. "A long period of unnecessarily slow progress could continue to exacerbate existing disparities in our economy."
  • Unemployment fell to 7.9% in August, but a broader measure adjusting for measurement problems and lower labor participation puts it more around 11%.
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com
MNI Washington Bureau | +1 202-371-2121 | evan.ryser@marketnews.com

To read the full story

Close

Why MNI

MNI is the leading provider

of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.

Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.