UPDATED 10:49 AM PT – Tuesday, October 6, 2020
Federal Reserve chairman Jerome Powell said there is little risk of overdoing it when it comes to providing stimulus. While speaking before the National Association for Business Economics Tuesday, he said providing too little support will lead to a weak recovery.
On the other hand, Powell noted that even if policy makers provide too much stimulus, the money will not go to waste. He said the U.S. risks losing the momentum it has made if Congress does not compromise on providing more support.
“Still, since it appears that many will undergo extended periods of unemployment, there is likely to be a need for further support,” Powell stated. “Second, aid to firms in particular, the Paycheck Protection Program and the general boost to aggregate demand have so far partly forestalled an expected wave of bankruptcies and less into permanent layoffs.”
Speech by Chair Powell on recent economic developments and the challenges ahead: https://t.co/5RgxKkqiTq
Watch Live: https://t.co/7dj7glkOps
— Federal Reserve (@federalreserve) October 6, 2020
The Federal Reserve chairman also reaffirmed his intent to keep interest rates near zero until the labor market reached maximum employment.