Powell Welcomes Congress' Fiscal Work

Q: Is the $900bn fiscal package now in Congress sufficient? Also, can you put detail on how concerning you think the recent COVID surge is?

• A: On fiscal: the case for fiscal policy is very strong. The details are entirely up to Congress. I would welcome the work that Congress is doing right now. But I don't have a view on the size of it, it's obviously a substantial bill.- On the surge: Would have thought growth in cases would have held back the economy more than it actually has. So we have overestimated the effects on the economy. This spike is so much larger and forecasters generally do think this will have an effect on suppressing activity, esp going to bars/restaurants, airplanes/hotels, you are starting to see that.
• How big will the impact be? We don't know. You are seeing some slowing down and Q1... The coming months will be challenging, Q1 will show significant effects. At the same time people are getting vaccinated NOW, by end of Q2 you will see significant numbers of people vaccinated. How will that play into econ activity? We don't have any experience with this.- "many people have the expectation that the second half of next year the economy should perform strongly. We should be getting people back to work. Businesses should be reopening and that kind of thing. The issue is the next getting through the next four, five, six months. That is key. Clearly, there is going to be need for help there and my sense and hope is we will be getting that."